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<!DOCTYPE html>
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<title>Part III | Probabilistic Reasoning</title>
<meta name="description" content="We explore practical implementations of probabilistic reasoning applied to several domains, especially those in human organizations." />
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<meta name="twitter:description" content="We explore practical implementations of probabilistic reasoning applied to several domains, especially those in human organizations." />
<meta name="author" content="William G. Foote" />
<meta name="date" content="2020-10-10" />
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<div class="book without-animation with-summary font-size-2 font-family-1" data-basepath=".">
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<ul class="summary">
<li><a href="./">Probabilistic Reasoning: A Primer</a></li>
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<li class="chapter" data-level="" data-path="index.html"><a href="index.html"><i class="fa fa-check"></i>Preamble</a><ul>
<li class="chapter" data-level="" data-path="index.html"><a href="index.html#why-this-book"><i class="fa fa-check"></i>Why this book</a></li>
<li class="chapter" data-level="" data-path="index.html"><a href="index.html#premises"><i class="fa fa-check"></i>Premises</a></li>
<li class="chapter" data-level="" data-path="index.html"><a href="index.html#dont-we-know-everything-we-need-to-know"><i class="fa fa-check"></i>Don’t we know everything we need to know?</a></li>
<li class="chapter" data-level="" data-path="index.html"><a href="index.html#what-we-desire"><i class="fa fa-check"></i>What we desire</a></li>
<li class="chapter" data-level="0.1" data-path="index.html"><a href="index.html#frequentist-or-probabilistic"><i class="fa fa-check"></i><b>0.1</b> Frequentist or probabilistic?</a></li>
<li class="chapter" data-level="" data-path="index.html"><a href="index.html#a-work-in-progress"><i class="fa fa-check"></i>A work in progress</a></li>
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<li class="chapter" data-level="" data-path="part-i-background.html"><a href="part-i-background.html"><i class="fa fa-check"></i>Part I. Background</a></li>
<li class="chapter" data-level="1" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html"><i class="fa fa-check"></i><b>1</b> Plausibility, Probability and Information</a><ul>
<li class="chapter" data-level="1.1" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html#some-surprise"><i class="fa fa-check"></i><b>1.1</b> Some Surprise</a></li>
<li class="chapter" data-level="1.2" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html#informative"><i class="fa fa-check"></i><b>1.2</b> Informative?</a></li>
<li class="chapter" data-level="1.3" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html#we-have-a-proposition-for-you"><i class="fa fa-check"></i><b>1.3</b> We have a proposition for you</a></li>
<li class="chapter" data-level="1.4" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html#the-power-of-plausible-thinking"><i class="fa fa-check"></i><b>1.4</b> The power of plausible thinking</a></li>
<li class="chapter" data-level="1.5" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html#how-many-ways"><i class="fa fa-check"></i><b>1.5</b> How many ways?</a></li>
<li class="chapter" data-level="1.6" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html#how-informative"><i class="fa fa-check"></i><b>1.6</b> How informative?</a></li>
<li class="chapter" data-level="1.7" data-path="plausibility-probability-and-information.html"><a href="plausibility-probability-and-information.html#nota-bene"><i class="fa fa-check"></i><b>1.7</b> Nota Bene</a></li>
</ul></li>
<li class="chapter" data-level="2" data-path="probability-for-real-people.html"><a href="probability-for-real-people.html"><i class="fa fa-check"></i><b>2</b> Probability for Real People</a><ul>
<li class="chapter" data-level="2.1" data-path="probability-for-real-people.html"><a href="probability-for-real-people.html#can-we-rationally-reason"><i class="fa fa-check"></i><b>2.1</b> Can we rationally reason?</a><ul>
<li class="chapter" data-level="2.1.1" data-path="probability-for-real-people.html"><a href="probability-for-real-people.html#priors-what-we-think-can-happen"><i class="fa fa-check"></i><b>2.1.1</b> Priors: what we think can happen</a></li>
<li class="chapter" data-level="2.1.2" data-path="probability-for-real-people.html"><a href="probability-for-real-people.html#likelihoods-thinking-about-the-data"><i class="fa fa-check"></i><b>2.1.2</b> Likelihoods: thinking about the data</a></li>
<li class="chapter" data-level="2.1.3" data-path="probability-for-real-people.html"><a href="probability-for-real-people.html#altogether-now"><i class="fa fa-check"></i><b>2.1.3</b> Altogether now</a></li>
<li class="chapter" data-level="2.1.4" data-path="probability-for-real-people.html"><a href="probability-for-real-people.html#updating-beliefs"><i class="fa fa-check"></i><b>2.1.4</b> Updating beliefs</a></li>
</ul></li>
<li class="chapter" data-level="2.2" data-path="probability-for-real-people.html"><a href="probability-for-real-people.html#whats-next"><i class="fa fa-check"></i><b>2.2</b> What’s next?</a></li>
</ul></li>
<li class="chapter" data-level="" data-path="part-ii-using-r.html"><a href="part-ii-using-r.html"><i class="fa fa-check"></i>Part II. Using R</a></li>
<li class="chapter" data-level="3" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html"><i class="fa fa-check"></i><b>3</b> Warming up to R and more</a><ul>
<li class="chapter" data-level="3.1" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#overview"><i class="fa fa-check"></i><b>3.1</b> Overview</a></li>
<li class="chapter" data-level="3.2" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#what-is-r"><i class="fa fa-check"></i><b>3.2</b> What is <code>R</code>?</a></li>
<li class="chapter" data-level="3.3" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#r-for-analytics"><i class="fa fa-check"></i><b>3.3</b> <code>R</code> for analytics</a></li>
<li class="chapter" data-level="3.4" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#hot-and-cold-running-resources"><i class="fa fa-check"></i><b>3.4</b> Hot and cold running resources</a></li>
<li class="chapter" data-level="3.5" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#gettingR"><i class="fa fa-check"></i><b>3.5</b> Installing R</a><ul>
<li class="chapter" data-level="3.5.1" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#installing-r-on-a-windows-computer"><i class="fa fa-check"></i><b>3.5.1</b> Installing R on a Windows computer</a></li>
<li class="chapter" data-level="3.5.2" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#installing-r-on-a-mac"><i class="fa fa-check"></i><b>3.5.2</b> Installing R on a Mac</a></li>
<li class="chapter" data-level="3.5.3" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#installing-r-on-a-linux-computer"><i class="fa fa-check"></i><b>3.5.3</b> Installing R on a Linux computer</a></li>
<li class="chapter" data-level="3.5.4" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#installingrstudio"><i class="fa fa-check"></i><b>3.5.4</b> Downloading and installing RStudio</a></li>
</ul></li>
<li class="chapter" data-level="3.6" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#first-day-at-school"><i class="fa fa-check"></i><b>3.6</b> First day at school</a><ul>
<li class="chapter" data-level="3.6.1" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#install-r-markdown"><i class="fa fa-check"></i><b>3.6.1</b> Install <code>R Markdown</code></a></li>
</ul></li>
<li class="chapter" data-level="3.7" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#install-latex"><i class="fa fa-check"></i><b>3.7</b> Install LaTex</a><ul>
<li class="chapter" data-level="3.7.1" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#our-first-file"><i class="fa fa-check"></i><b>3.7.1</b> Our first file</a></li>
</ul></li>
<li class="chapter" data-level="3.8" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#some-fun-with-stan"><i class="fa fa-check"></i><b>3.8</b> Some fun with Stan</a></li>
<li class="chapter" data-level="3.9" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#github"><i class="fa fa-check"></i><b>3.9</b> Github</a></li>
<li class="chapter" data-level="3.10" data-path="warming-up-to-r-and-more.html"><a href="warming-up-to-r-and-more.html#jargon"><i class="fa fa-check"></i><b>3.10</b> jaRgon</a></li>
</ul></li>
<li class="chapter" data-level="4" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html"><i class="fa fa-check"></i><b>4</b> Tickling the Ivories</a><ul>
<li class="chapter" data-level="4.1" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#start-to-tickle"><i class="fa fa-check"></i><b>4.1</b> Start to tickle</a></li>
<li class="chapter" data-level="4.2" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#try-this-exercise"><i class="fa fa-check"></i><b>4.2</b> Try this exercise</a></li>
<li class="chapter" data-level="4.3" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#building-some-character"><i class="fa fa-check"></i><b>4.3</b> Building Some Character</a></li>
<li class="chapter" data-level="4.4" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#the-plot-thickens"><i class="fa fa-check"></i><b>4.4</b> The plot thickens</a><ul>
<li class="chapter" data-level="4.4.1" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#try-this-example"><i class="fa fa-check"></i><b>4.4.1</b> Try this example</a></li>
</ul></li>
<li class="chapter" data-level="4.5" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#arrays-and-you"><i class="fa fa-check"></i><b>4.5</b> Arrays and You</a><ul>
<li class="chapter" data-level="4.5.1" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#try-this-exercise-1"><i class="fa fa-check"></i><b>4.5.1</b> Try this exercise</a></li>
<li class="chapter" data-level="4.5.2" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#more-about-residuals"><i class="fa fa-check"></i><b>4.5.2</b> More about residuals</a></li>
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<li class="chapter" data-level="4.6" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#more-array-work"><i class="fa fa-check"></i><b>4.6</b> More Array Work</a></li>
<li class="chapter" data-level="4.7" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#summary"><i class="fa fa-check"></i><b>4.7</b> Summary</a></li>
<li class="chapter" data-level="4.8" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#further-reading"><i class="fa fa-check"></i><b>4.8</b> Further Reading</a></li>
<li class="chapter" data-level="4.9" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#practice-sets"><i class="fa fa-check"></i><b>4.9</b> Practice Sets</a><ul>
<li class="chapter" data-level="4.9.1" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#purpose-process-product"><i class="fa fa-check"></i><b>4.9.1</b> Purpose, Process, Product</a></li>
<li class="chapter" data-level="4.9.2" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#r-markdown-set-up"><i class="fa fa-check"></i><b>4.9.2</b> <code>R Markdown</code> set up</a></li>
<li class="chapter" data-level="4.9.3" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#mutual-fund-simulation"><i class="fa fa-check"></i><b>4.9.3</b> Mutual Fund simulation</a></li>
<li class="chapter" data-level="4.9.4" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#healthcare-provider-admission-rates"><i class="fa fa-check"></i><b>4.9.4</b> Healthcare provider admission rates</a></li>
<li class="chapter" data-level="4.9.5" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#practice-set-debrief"><i class="fa fa-check"></i><b>4.9.5</b> Practice Set Debrief</a></li>
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<li class="chapter" data-level="4.10" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#project-captive-financing"><i class="fa fa-check"></i><b>4.10</b> Project: Captive Financing</a><ul>
<li class="chapter" data-level="4.10.1" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#purpose"><i class="fa fa-check"></i><b>4.10.1</b> Purpose</a></li>
<li class="chapter" data-level="4.10.2" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#problem-2"><i class="fa fa-check"></i><b>4.10.2</b> Problem</a></li>
<li class="chapter" data-level="4.10.3" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#data"><i class="fa fa-check"></i><b>4.10.3</b> Data</a></li>
<li class="chapter" data-level="4.10.4" data-path="tickling-the-ivories.html"><a href="tickling-the-ivories.html#work-flow"><i class="fa fa-check"></i><b>4.10.4</b> Work Flow</a></li>
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<li class="chapter" data-level="5" data-path="counting-on-tibble.html"><a href="counting-on-tibble.html"><i class="fa fa-check"></i><b>5</b> Counting on tibble</a><ul>
<li class="chapter" data-level="5.1" data-path="counting-on-tibble.html"><a href="counting-on-tibble.html#counting-the-ways"><i class="fa fa-check"></i><b>5.1</b> Counting the ways</a></li>
<li class="chapter" data-level="5.2" data-path="counting-on-tibble.html"><a href="counting-on-tibble.html#having-all-of-our-marbles"><i class="fa fa-check"></i><b>5.2</b> Having all of our marbles</a></li>
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<li class="chapter" data-level="6" data-path="sampling-the-hypothetical.html"><a href="sampling-the-hypothetical.html"><i class="fa fa-check"></i><b>6</b> Sampling the Hypothetical</a><ul>
<li class="chapter" data-level="6.1" data-path="sampling-the-hypothetical.html"><a href="sampling-the-hypothetical.html#on-your-marks"><i class="fa fa-check"></i><b>6.1</b> On your marks …</a></li>
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<li><p>Sampling the hypothetical sets the stage to solve for <span class="math inline">\(Pr(\theta \mid x)\)</span>, where <span class="math inline">\(\theta\)</span> are the hypothetical parameter values we desparately search for given hopefully not too many covariates <span class="math inline">\(x\)</span>.</p></li>
<li><p>Statistical narcissism, also known as linear regression models, especially species of Gaussians, reclaims, revises, and expands our consciousness for the workhorse model of statistical analysis.</p></li>
<li><p>xxx</p></li>
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