The decisions we make in life often come down to Bayes' Theorem, but most of us don't even realise what it is. So how does it work?
Our world view and resultant actions are often driven by a simple theorem, devised in secret more than 150 years ago by a quiet English mathematician and theologian, Thomas Bayes, and only published after his death.
Bayes’ Theorem was famously used to crack the Nazi Enigma code during World War II, and now manages uncertainty across science, technology, medicine and much more.
Bayes’ Theorem explained
Thomas Bayes’ insight was remarkably simple. The probability of a hypothesis being true depends on two criteria:
how sensible it is, based on current knowledge (the “prior”)
how well it fits new evidence.
Yet, for 100 years after his death, scientists typically evaluated their hypotheses against only the new evidence. This is the traditional hypothesis-testing (or frequentist) approach that most of us are taught in science class.
The difference between the Bayesian and frequentist approaches is starkest when an implausible explanation perfectly fits a piece of new evidence.
Let me concoct the hypothesis: “The Moon is made of cheese.”
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