092909A Lecture on Probability

092909A Lecture on Probability - A Lecture on Probability...

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A Lecture on Probability Rob Leachman E10 September 29, 2009 Sep 29, 2009 Basic Probability 1
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Uncertainty • Almost all decisions involve some level of Almost all decisions involve some level of uncertainty •Categories of uncertainty Categories of uncertainty – Unknown but knowable for some cost and effort (e.g., overconfidence test) – Some residual level of uncertainty, but we can describe range and likelihood – Completely unknown Probability is suited for category 2 Sep 29, 2009 Basic Probability 2
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Probability theory • Probability theory grew out of gambling Probability theory grew out of gambling, which dates at least as far back as ancient Egypt First formal probability theory was published by Pascal circa 1700 A useful pictorial aid for thinking about b bilit i th V Di probability is the Venn Diagram • Let S denote all possible outcomes Sep 29, 2009 Basic Probability 3
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