16INTRODUCTION TO THE BAYES FACTOR AND POSTERIOR ODDS: THE COMPETITION OF IDEAS
In the previous chapter, we saw that we can view a hypothesis test as an extension of parameter estimation. In this chapter, we’ll think about hypothesis tests instead as a way to compare ideas with an important mathematical tool called the Bayes factor. The Bayes factor is a formula that tests the plausibility of one hypothesis by comparing it to another. The result tells us how many times more likely one hypothesis is than the other.
We’ll then see how to combine the Bayes factor with our prior beliefs to come up with the posterior odds, which tells us how much stronger ...
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