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Bayes' Theorem is a key concept in probability that updates probabilities based on new evidence, applicable in fields like statistics, decision theory, and machine learning. The paper explains its mathematical formulation and illustrates its use in medical diagnosis, spam filtering, and other real-world scenarios. Ultimately, it emphasizes the theorem's significance in rational belief updating and evidence-based reasoning.

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3 views2 pages

Sas 4

Bayes' Theorem is a key concept in probability that updates probabilities based on new evidence, applicable in fields like statistics, decision theory, and machine learning. The paper explains its mathematical formulation and illustrates its use in medical diagnosis, spam filtering, and other real-world scenarios. Ultimately, it emphasizes the theorem's significance in rational belief updating and evidence-based reasoning.

Uploaded by

arvindkverma2007
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Title: Bayes’ Theorem and Its Applications in Decision Making

Author: [Your Name]


Department of Mathematics / Statistics
[Your Institution Name]

Abstract

Bayes’ Theorem is a fundamental result in probability theory that describes the process of
updating probabilities based on new evidence. It is foundational in statistical inference,
decision theory, and machine learning. This paper introduces the theorem, its mathematical
formulation, and real-world applications including diagnostics and spam filtering.

1. Introduction

Traditional (frequentist) probability treats probabilities as fixed, but Bayesian probability


interprets them as degrees of belief, which can change with new information. At the heart of
Bayesian reasoning lies Bayes’ Theorem, which quantifies this belief update process.

2. Mathematical Formulation

Given events AAA and BBB with P(B)≠0P(B) \neq 0P(B)=0, Bayes’ Theorem states:

P(A∣B)=P(B∣A)⋅P(A)P(B)P(A|B) = \frac{P(B|A) \cdot P(A)}{P(B)}P(A∣B)=P(B)P(B∣A)⋅P(A)

where:

 P(A)P(A)P(A): prior probability of AAA

 P(B∣A)P(B|A)P(B∣A): likelihood of observing BBB given AAA

 P(A∣B)P(A|B)P(A∣B): posterior probability of AAA after observing BBB

 P(B)P(B)P(B): marginal probability of BBB

3. Example: Medical Diagnosis

Suppose a disease affects 1% of the population. A test detects the disease with 99%
sensitivity and has a 5% false positive rate.

Let:

 DDD: has disease

 TTT: test is positive


P(D)=0.01,P(T∣D)=0.99,P(T∣not D)=0.05P(D) = 0.01,\quad P(T|D) = 0.99,\quad P(T|\text{not }
D) = 0.05P(D)=0.01,P(T∣D)=0.99,P(T∣not D)=0.05

Using Bayes’ Theorem:

P(D∣T)=0.99⋅0.01(0.99⋅0.01)+(0.05⋅0.99)≈0.166P(D|T) = \frac{0.99 \cdot 0.01}{(0.99 \cdot


0.01) + (0.05 \cdot 0.99)} \approx 0.166P(D∣T)=(0.99⋅0.01)+(0.05⋅0.99)0.99⋅0.01≈0.166

Surprisingly, the probability a person has the disease given a positive result is only 16.6%,
not 99%.

4. Real-World Applications

 Spam Filtering: Classifiers use Bayes’ theorem to compute the probability that an
email is spam based on word frequencies (Naive Bayes Classifier).

 Machine Learning: Bayesian inference is used in probabilistic modeling and decision-


making under uncertainty.

 Finance: Risk assessment and portfolio management incorporate Bayesian updates.

 Forensic Science: Used in courtrooms to interpret DNA or fingerprint match


probabilities.

5. Conclusion

Bayes’ Theorem is more than a mathematical identity — it is a principle of rational belief


updating. Its simplicity belies its immense power in areas requiring evidence-based
reasoning, making it indispensable in modern data-driven sciences.

References

1. Feller, W. An Introduction to Probability Theory, Wiley.

2. MacKay, D. J. C. Information Theory, Inference and Learning Algorithms, Cambridge


University Press.

3. Gelman, A. et al. Bayesian Data Analysis, CRC Press.

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