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Bayes theorem


A relationship between the conditional and the marginal probabilities of random events. LetP[A] denote the marginal probability of A and let P[A\B] denote the probability of A conditional on B. Bayes theorem states that P[Al|B] =P[B|A] x P[A]/P[B], given P[B] > 0.


Reference: Oxford Press Dictonary of Economics, 5th edt.