Dante Development Corporation is considering bidding on a contract for a new office building complex. Figure 4.17 shows the decision tree prepared by one of Dante’s analysts. At node 1,….
Define prior probability distributions for the following beliefs
Suppose you’re playing air hockey with some friends and flip a coin to see who starts with the puck. After playing 12 times, you realize that the friend who brings the coin almost always seems to go first: 9 out of 12 times. Some of your other friends start to get suspicious. Define prior probability distributions for the following beliefs:
• One person who weakly believes that the friend is cheating and the true rate of coming up heads is closer to 70 percent.
• One person who very strongly trusts that the coin is fair and provided a 50 percent chance of coming up heads.
• One person who strongly believes the coin is biased to come up heads 70 percent of the time.