Glossary · Phase 2 · Math, when you need it
Conditional probability
How likely something is once you know something else is true, like rain given dark clouds.
Try it now
Rare things mostly produce false alarms, even with a good test. Raise how common it is and watch the answer jump.
Learn it properly
Conditional probability and Bayes · Update beliefs when new evidence arrives. About 30 minutes.
Other terms from the same lesson
- base-rate fallacy: Forgetting how rare something is to begin with. A 95%-accurate fraud flag can still be wrong most of the time when fraud is rare.
- Bayes' rule: A way to update how likely something is when new evidence arrives.
- posterior: Your updated belief after seeing the evidence. Bayes' rule turns the prior into the posterior.
- prior: What you believe about a chance before you see new evidence, such as 1% of payments being fraud.
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