I got a different updated value ratio in part 2. If my calculations are wrong, would someone correct me?
V = Value; A = Analysis predicted value
Prior Probabilities:
P(V=0)=0.4999
P(V=1)=0.5
P(V=100)=0.0001
Analysis Result Probabilities:
P(A=0)=(0.5*0.4999)+((1/3)*0.5*1)=0.4166
(half the ones that are zero plus a third of the half where the test fails)
P(A=1)=0.4167
P(A=100)=0.1667
Accurate analysis results:
P(A=0|V=0)=P(A=1|V=1)=P(A=100|V=100)=(1/2)+(1/3)=2/3
(the half when the analysis works and reports accurately plus
the third when it fails but gives the correct value anyway)
“50:4” in the post refers to “P(V=1|A=100)*1 : P(V=100|A=100)*100″, not “EV(A=1) : EV(A=100)”. EV(A=1) is irrelevant, since we know that A is in fact 100.
I got a different updated value ratio in part 2. If my calculations are wrong, would someone correct me?
V = Value; A = Analysis predicted value
Prior Probabilities:
Analysis Result Probabilities:
Accurate analysis results:
Inaccurate analysis results:
Posterior Probabilities:
So,
So the ratio goes from 50:1 to 80:54 unless I’m off somewhere. I’m just starting to learn this stuff so any feedback will be welcome.
EDIT: formatting
DOUBLE EDIT: I realize this isn’t the point of the article and has no bearing on the conclusion. This was an exercise in how to update an EV for me.
“50:4” in the post refers to “P(V=1|A=100)*1 : P(V=100|A=100)*100″, not “EV(A=1) : EV(A=100)”. EV(A=1) is irrelevant, since we know that A is in fact 100.
I think this confused me:
I see that. Thanks.