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Drafted bayes report
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\usepackage{amsmath}
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\usepackage{amssymb}
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\usepackage[a4paper, total={6in, 10in}]{geometry}
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\usepackage{setspace}
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\begin{document}
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\newpage
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% Begin report
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\section{Objective}
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yada yada yah I started this independent study for my own selfish gain
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The educational focus of Implementations of Probability Theory surrounds the application of data
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models that produce non-deterministic insights through probabilistic methodology. By pursuing this
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study I hope to gain a deeper understanding of how to apply data in risk calculation for mitigation
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scenarios as they appear in real life, rather than the experimental lab conditions that enable algorithmic
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certainty.
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In contrast to the path of black-box artificial intelligence and algorithms taught in \textbf{CSCI 335: Machine Learning}, this study is tailored to methods
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designed to produce confidence levels for uncertain events using certain terms, leveraging logical,
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traceable, and definite, calculations. Current course offerings in the realm of data science focus largely on
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the storing and management of data, and it is noted that the cluster of data science was until very recently
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under the branding of data management. Implementations of Probability Theory is intended to extend
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learnings in previous courses, notably \textbf{CSCI 420: Principles of Data Mining}, for more advanced algorithms
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used at the intersection of data and computing after the preprocessing stage.
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After beginning this study the intended deliverable outline was determined to be technically implausible and has been replaced with
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demonstrations of applied algorithms. Taking inspiration from the retinal mosaic as displayed in \textbf{CSCI 431: Intro to Computer Vision}
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and discussion in \textbf{IGME 589: Computational Creativity and Algorithmic Art} on the appearance and nature of randomness in graphics, I hope to create
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a program that can determine the liklihood that randomly distributed colors on a hexagonal grid appear as they do in an image.
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\newpage
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\section{Units}
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Statistical Inference is any data analysis to draw conclusions from a sample to make assertions about the population.
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Methods include estimation via averages and confidence intervals, and hypothesis testing, which attempts to invalidate (never \textit{validate}) a hypothesis.
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\newpage
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\subsection{Unit 2: Probabilistic Theories and Epistemology}
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When developing probabilistic models it is vital to use domain expertise to expose the product to the full range of external variables that would be expected
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of a model applied to the real world. Without an appropriate understanding of both the limitations in research procedures and the true value of the data collected,
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the integrity of the model becomes inherently compromised.
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As data scientists, we are uniquely at risk of falling for this trap because it is hard to fully grasp domain expertise when the nature of data science
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in a business setting frequently means consulting for many separate projects with a collectively massive scope. Of equal consideration, it is also easy
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to assume that the sophistication of our tools overrides imperfections in the data, in spite of mantras like 'Garbage In, Garbage Out'.
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In this unit I explored some common fallacies and assumptions held by analysts who may not fully grasp the content that they work with,
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nor the problems they intend to solve. This required extensive research that I found was best digested in the form of books whose chapters chronicle multiple
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examples of a given principle. As such, the reading was not confined to just the timeslot designated for this unit. Research started during the months leading up
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to the start of the semester\footnote{Only research during the semester was logged in the timesheet} and have continued through the independent study. This structure was particularly helpful to pull me back and gain perspective of what
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my goal was when I was knee-deep in feature construction and model formulation.
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\subsubsection{Moral Hazards and The Bob Rubin Trade}
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Picking pennies in front of a steamroller.
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When studying the effectiveness of a model the scope of review must capture the entire range of the sample space. Discarding black swans that don't impact
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the client does not mean the results will not reflect on the client for an oversight. There is therefore a question of obligation for data scientists to include
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flags for significant events in reality that do not effect the proposed course of action to the client.
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The 2009 recession, attributed to the collapse of the housing market bubble, is the most common example of a moral hazard because the displacement of risk from
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banks who were federally required to give subprime loans to the taxpayer meant that banks could profit from subprime loans but would not be harmed when the inevitable
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occurred. In popular media, the housing bubble bursting is attributed to the banks where those in the industry passed off the event as something that nobody could
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have forseen.\footnote{For instance, in the 2015 movie \textit{The Big Short}, only a few savvy traders who bothered to look into the details find that banks had,
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in their ignorance, built the bundled mortgages on an unstable foundation.} In reality, banks only ignored a probablistic eventuality because their models did not
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need to account for such an event.
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Most emphasize the problems with risk transferrence when creating models. For this study's purposes, the important learning is that probablistic models should not
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drop evaluations as soon as an event leaves the scope of the immediate client.
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\subsubsection{Ignoring Improbable Outliers with Outsized Impact}
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In machine learning it is common for algorithms to drop the most extreme (or a random selection of) datapoints to avoid overfitting and errors in data collection.
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One issue with the current implementation of this procedure is that it is often done blindly, ignorant of information that these outliers may relay. For instance,
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in a selection of 300 water samples from a stream, all but a few show a normal amount of oxygen in the stream. A citizen scientist may discount the remaining pockets
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as a statistical implausibility that is most likely indicative of a failure in sample testing and drop the most extreme 5\% of datapoints.
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However, if these few pockets show a complete disruption of the dissolution process, the vast majority of aquatic life in the stream will eventually pass through
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these pockets without oxygen and die, resulting in an outsized impact from just a few sources.
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Nassim Taleb in \textit{Fooled By Randomness} describes this event with an analogy to Russian Roulette: If there was a 5/6 chance of winning a million dollars and a
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1/6 chance of killing yourself, many people would at least hesitate before pulling the trigger. But what if the barrel is 10,000 rounds and it was only a
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1/10,000 chance of harm? In this case, many less-than-rational actors use the game repeatedly to acquire wealth indefinitely, forgetting or even outright ignorant
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that eventually the unlikely, or, as the actor would see it, the unthinkable, happens and all of the gains are completely negated.
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\subsubsection{Fooled By Randomness}
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May justify its own subsection since the others acknowledge small probabilities whereas this is outright randomness.
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\subsubsection{Lindy Effect}
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"For the perishable, every additional day in its life translates into a shorter additional life expectancy.
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For the nonperishable, every additional day may imply a longer life expectancy."
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A tool that is proven is more likely to stand the test of time than a new tool replacing it since it is unproven.
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"The robustness of an item is proportional to its life!"
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"Inaccurate science\ldots is constantly being published. The Lindy-conscious consumer of scientific data will take seriously only
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information that has held up over a period of time."\footnote{\url{https://www.nytimes.com/2021/06/17/style/lindy.html}}
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\subsubsection{Decision Theory}
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Decision theory is the study of how people make decisions with uncertain information. There are two main branches of decision theory:
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\subsubsection*{Normative/Rational Decision Theory}
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This branch studies how people \textit{should} make decisions. In problems with other actors, as in game theory, it is assumed that all other actors will also
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act with perfect rationality, allowing for precise calculation of the actions of all of the others and their expected utility to the agent.
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\subsubsection*{Descriptive Decision Theory}
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This branch studies how people actually make decisions which includes factors such as psychological and emotional biases.
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\subsubsection{Info Gap Decisions}
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In info gap decision theory there is not enough information to assign probabilities to events and the goal is to select a course of action that is robust in the
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face of uncertainty. Where decision theory can predict expectations in irrationality to determine expected values, info gap decisions approximate the range of
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probabilities and weight them to estimate expected value. In essence, it applies probabilities to probabilities, adding an additional layer to insulate calculations
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from a lack of data or lack of understanding of a topic.
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\subsubsection{Methodology Considerations}
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Given I have taken 10134023 instances of the last 40 years, all of which Obama has been alive, I can say with a high degree of certainty that Obama is immortal.
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An event never occurring in history does not discount its possiblity of occurring in the future. Similarly, events that may have been impossible in the past
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are not necessarily impossible in the future.
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Also, psychology. Someone who knows they are being studied will act differently than someone who isn't being studied so models will be inaccurate.
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\newpage
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\subsection{Unit 3: Bayesian Statistics}
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This unit was deliberately separated from statistical review due to the percieved complexity of the topic and the magnitude of usage in recent data science
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breakthroughs. Bayes Theorem is a part of the cirriculum for both \textbf{MATH 351 - Probability and Statistics} and \textbf{CSCI 420 - Principles of Data Mining}.
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However, as both approached the topic from different perspectives and while neither solidified my personal confidence in its use, I chose to take extra time to learn
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this important topic in my own way.
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It has been said that statistics does not come naturally to the human brain, hence statistics is, by mathematical standards, a
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young discipline. Resulting research on Bayesian statistics has led me to the conclusion that the opposite may be true - Bayes Theorem is quite intuitive, but
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its discipline has not had the time to crystallize best practices for instructing it. For instance, updating one's beliefs to compare probabilities with the
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number of documented occurrences is frequently used in philosophical discussion in the form of explanations that subsets with high liklihood of fufilling terms
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are valid classifications even when the subset size results in overall fufilled terms to be infrequently categorized as the proposed subset. Most people understand
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these expressions but, when shown a table and how to calculate those ratios, the content enters the realm of collegiate instruction.
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\subsubsection{Bayes Theorem}
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The equation for Bayes Theorem is as follows:
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\[
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P(A|E) = \frac{P(A) * P(E|A)}{P(A) * P(E|A) + (1 - P(A)) * P(E|\neg A)}
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\]
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This formula appears more complex as it is. The denominator, while directly translating to "The probability of A times the probability of event E occuring in A
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divided by the probability of A times the probability of event E occuring in A plus the probability of not A times the probability of E occuring in not A"
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can be more easily expressed simply as \(P(E)\) or the probability of event E occuring.
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By utilizing venacular more familiar to everyday life, Bayes Theorem can be translated into:
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\[
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\text{P(occurence came from category)} = \frac{\text{\# of occurences from category}}{\text{total \# of occurences}}
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\]
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Finally, this equation is updated to replace descriptions with technical terms:
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\[
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\text{Posterior Probability} = \frac{\text{prior} * \text{likelihood}}{\text{Evidence}}
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\]
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Even this equation can be misconstrued as a number of arrangements of ratios involving total occurrences from a category or non-occurrences from outside
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of the category so as a final demonstration, the sample space will be visualized geometrically
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\footnote{Concept credit to 3Blue1Brown on Youtube, this video is what finally clarified in my mind what the equation behind Bayes Theorem meant.\\
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\url{https://www.youtube.com/watch?v=HZGCoVF3YvM}} as a 1 unit by 1 unit square.
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\subsubsection{Bayesian Updating}
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Bayesian Updating is another term that has been added to buzzword vocabulary to describe a process that isn't directly related to Bayesian Statistics but appears
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to have been rediscovered by academia through study of applied Bayes Theorem. In essence, Bayesian Updating simply states that observed occurrences should not
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override previous evidence and that it should instead be added to it in equal weight (equal value being a naive assumption). This evidence updating makes
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applications of Bayes Theory calculate posterior probabilities continuously as new information enters the system rather than a calculation that is only done once.
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\subsubsection{Bayesian Belief Networks}
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Bayesian Belief Networks are probablistic graphical models that preserve conditional dependence between random variables. In spite of its name,
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Bayesian Belief Networks do not necessarily apply Bayesian models, though they are a way to utilize Bayes Theorem for domains with greater complexity beyond a
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single posterior probability. In this type of network, edges are directed and the structure is utilized in a single direction. This is in contrast to undirected
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Hidden Markov Models that do not assume the order of aquisition of random variables.
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\end{document}
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