EC255 Lecture Notes - Lecture 3: Geometric Distribution, Standard Deviation, Binomial Distribution
Document Summary
A formula that extends the use of the law of conditional probabilities to allow revision of original probabilities with new information. The denominator of bayes" rule includes a product expression for every partition in the sample space y, including the event x itself. The denominator is a collectively exhaustive listing of mutually exclusive outcomes of y. Staticians use bayes" rule to revise probabilities in light of new information. Bayes" rule provides a way of incorporating prior knowledge into our calculations. Or this reason, it can be a valuable tool in decision making. A random variable is a variable that contains the outcomes of a chance experiment. The two categories of random variables are discrete and continuous. A discrete random variable is if the set of all possible values is at most a finite or a count ably infinite number of possible values. In most situations, discrete random variables product values that are nonnegative whole numbers.
