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Bayes' Theorem: Mia!, The Probability of Having Good Seats Given That You Are Seeing Wicked (P (G/A

This document discusses Bayes' theorem, which provides a means for updating probabilities when new information is obtained. It presents Bayes' theorem for both two-event and multi-event cases. An example calculates the probability of seeing specific shows given having bad seats by applying Bayes' theorem to initial probabilities and the probabilities of having good or bad seats for each show.

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76 views

Bayes' Theorem: Mia!, The Probability of Having Good Seats Given That You Are Seeing Wicked (P (G/A

This document discusses Bayes' theorem, which provides a means for updating probabilities when new information is obtained. It presents Bayes' theorem for both two-event and multi-event cases. An example calculates the probability of seeing specific shows given having bad seats by applying Bayes' theorem to initial probabilities and the probabilities of having good or bad seats for each show.

Uploaded by

zahoor80
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Queens College, Economics 249, Geordan Hull, 1

BAYES THEOREM
Provides a means for making probability calculations after revising probabilities when obtaining
new information in an important phase of probability analysis.

Prior
Probabilitie
s

New
Informatio
n

Application
of Bayes
Theorem

Posterior
Probabilitie
s

When given P(A) and P(AB), one can calculate P(B/A) by manipulating the information in the
Multiplication Rule. However, one could not calculate P(A/B). Similarly, when given P(B) and
P(AB), one can calculate P(A/B) by manipulating the information in the Multiplication Rule.
However, one could not calculate P(B/A). There is where one can now apply Bayes Theorem.
BAYES THEOREM (TWO-EVENT CASE)
P(A1/B) =

P(A1)P(B/A1)
P(A1)P(B/A1) + P(A2)P(B/A2)

P(A2/B) =

P(A2)P(B/A2)
P(A1)P(B/A1) + P(A2)P(B/A2)
BAYES THEOREM (MULTI-EVENT CASE)

P(Ai/B) =

P(Ai)P(B/Ai)
P(A1)P(B/A1) + P(A2)P(B/A2) + + P(An)P(B/An)
EXAMPLE

Given: G = Having good seats, B = Having bad seats, A 1 = Seeing Wicked, A2 = Seeing Mama
Mia!, the probability of having good seats given that you are seeing Wicked [P(G/A1)] = 0.98, the
probability of having good seats given that you are seeing Mama Mia! [P(G/A2)] = 0.95, P(A1) =
0.65, and P(A2) = 0.35 Please find the probability of a) Seeing Wicked given you have bad
seats, and b) Seeing Mama Mia! given you have bad seats.
P(B/A1) = 1 - P(G/A1) = 1 - 0.98 = 0.02; P(B/A2) = 1 - P(G/A2) = 1 - 0.95 = 0.05
a) P(A1/B) = [(0.65)(0.02)]/[(0.65)(0.02) + (0.35)(0.05)] = 0.0130/(0.0130 + 0.0175) =
0.0130/0.0305 = 0.4262
b) P(A2/B) = [(0.35)(0.05)]/[(0.65)(0.02) + (0.35)(0.05)] = 0.0175/(0.0130 + 0.0175) =
0.0175/0.0305 = 0.5738

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