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Exercise 3.18 - Bayes factor for coin tossing
Answers
The Bayes factor for hypothesis test is defined by:
where is the null hypothesis.
We have:
And
according to Exercise 3.17. The Bayes factor is approximately .
When and , the Bayes factor is:
When remains a constant deviated from 0.5, the larger is, the more likely that the coin is biased. This is an intuitive conclusion from the law of large numbers.