Bay s Theorem

Bay s Theorem In probability theory and statistics, Bayes' theorem (alternatively Bayes' law or Bayes' rule) is a theorem with two distinct interpretations. In the Bayesian interpretation, it expresses how a subjective degree of belief should rationally change to account for evidence. In the frequentist interpretation, it relates inverse representations of the probabilities concerning two events. In the Bayesian interpretation, Bayes' theorem is fundamental to Bayesian statistics, and has applications in fields including science, engineering, economics (particularly microeconomics), game theory, medicine and law. The application of Bayes' theorem to update beliefs is called Bayesian inference. Bayes' theorem is named for Thomas Bayes who first suggested using the theorem to update beliefs. His work was significantly edited and updated by Richard Price before it was posthumously read at the Royal Society. The ideas gained limited exposure until they were independently rediscovered and further developed by Laplace, who first published the modern formulation in his 1812 Thorie analytique des probabilits.

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Until the second half of the 20th century, the Bayesian interpretation attracted widespread dissent from the mathematics community who generally held frequentist views, rejecting Bayesianism as unscientific. However, it is now widely accepted. This may have been due to the development of computing, which enabled the successful application of Bayesianism to many complex problems. Frequentist interpretation :- In the frequentist interpretation, probability measures a proportion of outcomes. Bayes' theorem under this interpretation is most easily visualized using tree diagrams, as shown to the right. The two diagrams partition the same population in different ways. The upper diagram partitions the population into two groups, with and without property , and then partitions each group into two further groups, with and without property . The lower diagram proceeds in reverse, first partitioning according to and then according to . (For example, might be having a risk factor for a medical condition, and might be having the condition.) If we pick every member of a population with property , and ask "what proportion of these have property ?", this gives the probability . Conversely, if we pick every member of the same population with property and ask "what proportion of these have property ?" this gives the probability . is the overall proportion with , and the overall proportion with . Bayes' theorem links these probabilities, which are in general different. The interpretations of the probability have been discussed below :-

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1. Bayesian Interpretation: This interpretation is based on the Bayes law. In this the probability measures the degree of beliefs. Bays theorem joins the degree of belief in a proposition before and after accounting the given evidences. For instance suppose that person A proposes that the biased coin is twice as likely to land heads than tails. Now the degree of belief in this can be true initially is 50%. The coin is now flipped many times in order to collect all the evidences. So the belief may rise to 70% if all the evidences support the proposition. For proposition G and evidence H: a. P (G), the prior is the initial degree of the belief in proposition G. b. P (G|H) the posterior is the degree of belief which is accounted for the evidence H. c. P (B|A) / P (B) represents the support evidence H provides for proposition G. 2. Frequentist Interpretation: This is defined with respect to a great number of trials where each trial produces one outcome from a given Set of all the possible outcomes. An event is basically a subset of the set of all possible outcomes. The probability f an event G is P (G) is the proportion of all the trials which produce an outcome in event G. Similarly the probability of H is P (H). Now here if only trials in which event G occurs are considered, the proportion in which event H also occurs is P (H|G). Similarly if only trials in which event H occurs are considered, the proportion in which event H also occurs is P (G|H). So it completely relates to the inverse or just opposite representations of the probabilities which concern with two events

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