What is the probability that the mayor is selfish

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Problem: Imagine there are two types of mayors: selfish and selfless. 70% of mayors are selfless. Voters do not observe the type of the mayor. They instead observe whether the mayor decided to spend money on improving gthe facilities of the local school or the local casino. The voters know that most of the time the best use of money is to spend it on improving the school. 15% of the time there is a boom in tourism and in this special situation, the best action is to improve the casino. Voters do not know if there is a boom in tourism. They only know that a good mayor will always do the correct thing (improve the local school in normal times and improve the casino when there is a boom). They also know that selfish mayors always improve the casino. What is the probability that the mayor is selfish after observing that the mayor built a casino?

Reference no: EM133596716

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