About Lesson
-
Prior Odds:
- Prior odds represent our initial belief or assessment about the likelihood of an event before considering any new evidence.
- Mathematically, if we denote the probability of an event as (P(A)), the odds in favor of the event are given by: [ text{Prior Odds} = frac{P(A)}{1 – P(A)} ]
-
Bayes’ Rule and Posterior Odds:
- Bayes’ rule allows us to update our beliefs based on new evidence. It relates the prior odds to the posterior odds after incorporating this evidence.
- Suppose we obtain new information (evidence) represented by (B). We want to find the updated odds, which we’ll call posterior odds.
- The posterior odds are given by: [ text{Posterior Odds} = frac{P(A|B)}{1 – P(A|B)} ] where (P(A|B)) is the probability of the event (A) given the evidence (B).
-
Bayes’ Rule Formula:
- Bayes’ rule connects the prior odds and the likelihood of the evidence: [ P(A|B) = frac{P(B|A) cdot P(A)}{P(B)} ]
- (P(A|B)) is the posterior probability of event (A) given evidence (B).
- (P(B|A)) is the likelihood of observing evidence (B) if event (A) is true.
- (P(A)) is the prior probability of event (A).
- (P(B)) is the overall probability of observing evidence (B).
- Bayes’ rule connects the prior odds and the likelihood of the evidence: [ P(A|B) = frac{P(B|A) cdot P(A)}{P(B)} ]
-
Interpreting Posterior Odds:
- If the posterior odds are greater than the prior odds, the evidence supports the occurrence of event (A).
- If the posterior odds are less than the prior odds, the evidence weakens the belief in event (A).
Remember that Bayes rule is a powerful tool for updating probabilities based on new information.
Join the conversation