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

Application of probability in business, Application of Probability in Busin...

Application of Probability in Business 1. Business games of chance for illustration, Raffles Lotteries. 2. Insurance firms: this is generally done when a new client or prop

Translate the formula into prefix form, Translate the following formula int...

Translate the following formula into a prefix form expression in Scheme: 5+4*(6-7/5)/3(14-5)(3+1)

If a sequence is bounded and monotonic then it is convergent, Theorem ...

Theorem If {a n } is bounded and monotonic then { a n } is convergent.  Be cautious to not misuse this theorem.  It does not state that if a sequence is not bounded and/or

Devide polynomials, what is the quotient of 20x to the power of 2 y-16x y t...

what is the quotient of 20x to the power of 2 y-16x y to the power of 2+ 8xy and -8xy

What was joe's approximate raw act score, Using the same mean and standard ...

Using the same mean and standard deviation from problem 10 (mean m = 20.1 and a standard deviation s = 5.8). Joe was informed that he scored at the 68 th percentile on the ACT, wh

.fractions, what is the difference between North America''s part of the tot...

what is the difference between North America''s part of the total population and Africa''s part

Compute the total and annual return on the investment, 1. Calculate the ann...

1. Calculate the annual interest that you will receive on the described bond-A $500 Treasury bond with a current yield of 4 .2% that is quoted at 106 points? 2. Compute the tota

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