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Definition 2.26 (Posterior probability)

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An individual's belief in the occurrence of the event based on her prior belief and some additional evidence .

Initially, the analyst's belief about the event is given by her prior probability . After having obtained the evidence , her probability of is, from (2.4), seen to change by a factor of .

Bayes formula (2.4) can be used repetitively. Having obtained the evidence and her posterior probability , the analyst may consider this as her current prior probability. When additional evidence becomes available, she may update her current belief in the same way as previously and obtain her new posterior probability:

(2.5)

Further updating of her belief about can be done sequentially as she obtains more and more evidence.

Risk Assessment

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