Hi
Below is a sample of a type of problem I'm struggling with.
I’d be enormously grateful for a step-by-step worked solution to it in simple terms. I’m embarrassed to admit that I’m Bayesianly challenged.
During a free trial period, an Internet horse race tipster has given out 100 tips as to the winner in each of the same number of races. 25% of these won, and the associated starting odds were high enough to enable his followers to turn a profit. Based on his success, he now decides to charge for the service. During his next 60 predictions his success rate drops to 10% winners, and his customers now lose. At this point how do they calculate the a posteriori probability of this decrease in successful predictions? They would want to do this in order have a quantitative basis (presumably a significance level) for deciding whether to continue with the service.
An aside: I’ve read that the good Reverend developed his theorem to calculate horserace probabilities.
Many thanks in advance,
Jim
