Bayes' theorem, also called Bayes' rule or Bayesian theorem, is a mathematical formula used to determine the conditional probability of events. The theorem uses the power of statistics and probability ...

Discover the base rate fallacy's impact on investing decisions. Learn how overlooking this cognitive bias can lead to financial misjudgments and market misconceptions.

Learn how prior probability informs economic theory and decision-making in Bayesian statistics. Understand its role before collecting new data.

Life is uncertain. None of us know what is going to happen. We know little of what has happened in the past or is happening now outside our immediate experience. Uncertainty has been called the ...