Unlocking the Power of Prior Beliefs: Bayesian Statistics Simplify Decision-Making
The article explains how Bayesian Statistics can help make better decisions by combining prior beliefs with new data. It introduces concepts like prior and posterior distributions, which show how beliefs change with new information. Conjugate priors simplify this process. By analyzing the posterior distribution, we can estimate parameters, predict future outcomes, and compare hypotheses. Bayesian tests and estimation methods are similar to traditional ones but use prior beliefs to make more informed decisions.