Bayes’ theorem, Mathematics

Assignment Help:

Bayes’ Theorem

In its general form, Bayes' theorem deals with specific events, such as A1, A2,...., Ak, that have prior probabilities. These events are mutually exclusive events that cover the entire sample space. Each prior probability is already known to the decision maker, and these probabilities have the following form: P(A1), P(A2),...., P(Ak). The events with prior probabilities produce, cause, or precede another event, say B.
A conditional probability relation exists between events A1, A2, ....., Ak and event B. The conditional probabilities are P(B|A1), P(B|A2), ..., P(B|Ak).

Bayes' formula allows us to calculate the probability of an event, say, A1 occurring given that event B has already occurred with a known probability, P(B). The probability of A1 occurring given that B has already occurred is the posterior (or revised) probability. It is denoted by P(A1|B). Thus, we are given P(A1) and the P(B|A1) which we use to calculate P(A1|B).

For any event Ai, Bayes' theorem has the form

2115_bayes theorem.png

 The probability that A1 and B occur simultaneously is equal to the probability that A1 occurs multiplied by the probability that B occurs given A1. Thus, we have

P(A1 and B) = P(A1) P(B|A1)

Since A1, A2, . . . . , Ak form a partition of the entire sample space when event B occurs, only one of the events in the partition occurs. Thus, we have

P(B) = P(A1 and B) + P(A and B) + .... + P(Ak and B)

We already know that for any event Ai,

P(Ai and B) = P(Ai) P(B|Ai)

When we substitute the formula for P(Ai and B) into the equation for P(B) we obtain

P(B) = P(A1) P(B|A1) + P(A2) P(B|A2) +...+ P(Ak) P(B|Ak)

If we then substitute P(B) and P(Ai and B) into the conditional probability, i.e. P(A|B) =  623_bayes theorem1.png    we obtain the generalized version of Bayes' formula, which is shown in the box.

Bayes' Theorem

P(Ai | B)  = 419_bayes theorem2.png

 

Example 

Suppose that a personnel administrator wishes to hire one person from among a number of job applicants for a clerical position. The job to be filled is fairly simple. On the basis of past experience, the personnel director feels that there is a 0.80 probability of an applicant being able to fill the position. This probability is the prior probability.

A personnel administrator usually interviews or tests each applicant, rather than select one at random. This procedure supplies additional direct information about the applicant. In light of this additional information, the personnel director may revise the prior probability about an applicant's chances for success or failure at the job. The revised probability is the posterior probability.

The terms prior and posterior refer to the time when information is collected. Before information is obtained, we have prior probabilities. Bayes' theorem provides a means of calculating posterior probabilities from prior probabilities. The next example illustrates the use of Bayes' theorem.


Related Discussions:- Bayes’ theorem

What is the purpose of the reparameterisation, We have independent observat...

We have independent observations Xi, for i = 1, . . . , n, from a mixture of m Poisson distributions with component probabilities d c and rates l c, for c = 1, . . . ,m. We decid

Java program for sorting algorithms, Introduction: In this project, yo...

Introduction: In this project, you will explore a few sorting algorithms. You will also test their efficiency by both timing how long a given sorting operation takes and count

Total accumulation of the amount deposited in saving account, A bank pays o...

A bank pays on its savings an interest rate of 6% per year but compounds interest monthly (i.e., estimates the interest each month and adds it to the balance).  You plan to deposit

Analyze the dynamic path of pork prices, A well-known simple model, applica...

A well-known simple model, applicable for analysing boom-bust cycles in agriculture, but extendable to analysing boom-bust cycles in many different areas of economics is the hog cy

Shares and dividend, how should i make my project on these topic?

how should i make my project on these topic?

Geometry Question, Does the Angle-Side Relationship Theorm work for all tri...

Does the Angle-Side Relationship Theorm work for all triangles or just a certain type of triangle? Does is correspond with the orthocenter of a triangle?

Determine the differential y = t 3 - 4t 2 + 7t, Determine the differentia...

Determine the differential for following.                                      y = t 3 - 4t 2 + 7t Solution Before working any of these we have to first discuss just

Determine the number of full withdrawals, A worker retires with a lump sum ...

A worker retires with a lump sum superannuation benefit of $500,000. She immediately invests this money in a fund earning 5% pa effective. One year after retirement she begins maki

Bits, What is the largest number (in decimal) that can be made with 6 bits?...

What is the largest number (in decimal) that can be made with 6 bits?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd