Probability

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Statistical independence Two events A and B are independent when:● P(A|B) = P(A), or equivalently, P(B|A) = P(B)● One event being true does not change theprobability of the other event happening e.g., A = wears socks, B = has blue eyes● P(wearing socks) is the same regardless ofwhether the person has blue eyes e.g., A = first person buys our product,B = next (random) person buys our product● Assumes customers don't talk to each other Would these be independent?● A = likes our ad, B = buys our productBUSI275: <strong>Probability</strong> 20 Sep 2011 14
Indep. vs. mutual exclusivity A = likes our ad, B = buys our product But what if someone says:● “Just because someone doesn't like our ad,doesn't mean that they can't still buy ourproduct – just because event A is truedoesn't mean that event B is impossible.” Is this a statement about independence ormutual exclusivity?BUSI275: <strong>Probability</strong> 20 Sep 2011 15
Page 1: Ch4: Probability20 Sep 2011BUSI275D
Page 4 and 5: Probability Chance of a particular
Page 6 and 7: Venn diagrams Box represents whole
Page 8 and 9: Addition rule: A ∪ BP(A ∪ B)=P(
Page 10 and 11: Mutual exclusivity Two events A and
Page 12 and 13: Conditional probability P(A|B): pro
Page 16 and 17: Independence and Bayes' rule Recall

Probability

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