7.7 Decision theory and hypothesis testing
7.7.1 Relationship between decision theory and classical hypothesis testing
It is possible to reformulate hypothesis testing in the language of decision theory. If we want to test versus , we have two actions open to us, namely,
As before, we shall write and for the prior probabilities of and and p0 and p1 for their posterior probabilities and
for the Bayes factor. We also need the notation
where is the prior density function.
Now let us suppose ...
Get Bayesian Statistics: An Introduction, 4th Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.