Conditional Probability

and Independence
 Conditional Probability

• You have defined the events A and

B.
• Suppose you are told that event B
occurs.
• Given this information, what is the
probability that event A occurs?
 Definition

P(A  B)
P(B | A) 
P(A)

P(A)  0
 The Multiplication Rule

• For any two events A and

B,

P(A  B)  P(A |
B)P(B)
 Example: Dollar Value

• A = event that the value of the $ falls.

• B = event that the supplier demands
changing the contract
• P(A) = 0.4
• P(B|A) = 0.8
• P(A and B) = P(A)x P(B|A) =0.4 x 0.8 =
0.32
 Some Facts

P(B | A)  P(B ' | A)  1

P(B | A)P(A)  P(B | A ')P(A ') 

P(B)
The Law of Total Probability

• Let A 1 ,…,A k be mutually exclusive and

exhaustive events.
• Then for any other event B:
k

P(B)   P ( B | Ai )P(Ai )
i1
 Bayesʼ Rule

• Let A 1 ,…,A k be mutually exclusive and

exhaustive events with prior probabilities
P(Ai).
• Then for any other event B with P(B)>0,
the posterior probability of A j given B is:

P(B | Aj )P(A j )
P(A j | B)  k

 P(B | Ai )P(Ai )
i1
 Example: Dollar Value

• A = event that the value of the $ falls.

• B = event that the supplier demands
changing the contract
• P(A) = 0.4
• P(B|A) = 0.8
• P(A and B) = P(A)x P(B|A) =0.4 x 0.8 = 0.32
• Suppose weʼre also told that
P(B|AC) = 0.3
• What is P(A|B)?
 P(A’) = 1 - P(A)= 1 - 0.4 = 0.6
k

P(B)   P ( B | Ai )P(Ai )
i1

P(B)  P ( B | A )P(A )+ P ( B | A’ )
P(A’
P(B) = 0.8*0.4 )
+ 0.3*0.6 = 0.32+0.18 = 0.5
P(A  B)  P(A |
B)P(B)
P(A | B)= P(A  B) = 0. 32 = 0.
64 P(B) 0.5
 Independence

• Events A and B are independent if

P(A | B)  P(A)
• Otherwise, they are dependent .
 Proposition

• A and B are independent if and only

if

P(A  B)  P(A)P(B)
 Mutual Independence

• Events A 1 ,…,A n are mutually

independent if:
 For every k ( k =2,3,…,n) A N D
every
subset of indices i1, i2,…,ik:

P(Ai  Ai  …
1 2
Ai )  P(Ai )P(Ai )…P(A )
k 1 2 ik