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Vital Statistics Probability and Statistics for Economics and Business

Learn fundamental probability models with Venn diagrams, conditional probability axioms, total probability rule, and Bayes’ rule for informed decision-making in economics and business.

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Vital Statistics Probability and Statistics for Economics and Business

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  1. Vital StatisticsProbability and Statistics for Economics and Business William H. Sandholm University of Wisconsin-Madison Brett A. Saraniti Northwestern University Chapter 2 Probability Models

  2. Figure 2.1: A Venn diagram.

  3. Figure 2.2: Basic definitions presented using Venn diagrams.

  4. Figure 2.3: A partition of S.

  5. Figure 2.4: Probability diagram for the Neofuturists example.

  6. Figure 2.5: The conditional probability axioms.

  7. Figure 2.6: The conditional probability formula.

  8. Figure 2.7: The total probability rule.

  9. Figure 2.8: Bayes’ rule in pictures.

  10. Figure 2.9: Independent events: P(A) = .6 × 1 = .6, P(B) = 1 × .2 = .2,P(A ∩ B) = .6 × .2 = .12.

  11. Figure 2.10: Probability diagram for the Linda problem.

  12. Figure 2.11: Probability diagrams for the Monty Hall problem.

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