Letâs imagine that you and a friend have spent the afternoon playing your favorite board game, and now, at the end of the game, you are chatting about this and that. Something your friend says leads you to make a friendly wager: that with one roll of the die from the game, you will get a 6. Straight odds are one in six, a 16 percent probability. But then suppose your friend rolls the die, quickly covers it with her hand, and takes a peek. âI can tell you this much,â she says; âitâs an even number.â Now you have new information and your odds change dramatically to one in three, a 33 percent probability. While you are considering whether to change your bet, your friend teasingly adds: âAnd itâs not a 4.â With this additional bit of information, your odds have changed again, to one in two, a 50 percent probability. With this very simple example, you have performed a Bayesian analysis. Each new piece of information affected the original probability, and that is Bayesian [updating].
