Bayesian posteriors for arbitrarily rare events.

ABSTRACT: We study how much data a Bayesian observer needs to correctly infer the relative likelihoods of two events when both events are arbitrarily rare. Each period, either a blue die or a red die is tossed. The two dice land on side [Formula: see text] with unknown probabilities [Formula: see text] and [Formula: see text], which can be arbitrarily low. Given a data-generating process where [Formula: see text], we are interested in how much data are required to guarantee that with high probability the observer's Bayesian posterior mean for [Formula: see text] exceeds [Formula: see text] times that for [Formula: see text] If the prior densities for the two dice are positive on the interior of the parameter space and behave like power functions at the boundary, then for every [Formula: see text] th

SUBMITTER: Fudenberg D 

PROVIDER: S-EPMC5441737 | biostudies-literature | 2017 May

REPOSITORIES: biostudies-literature