Blue oysters

https://arbital.com/p/blue_oysters

by Nate Soares Jul 6 2016 updated Jul 15 2016

A probability problem about blue oysters.


You're collecting exotic oysters in Nantucket, and there are two different bays you could harvest oysters from. In both bays, 11% of the oysters contain valuable pearls and 89% are empty. In the first bay, 4% of the pearl-containing oysters are blue, and 8% of the non-pearl-containing oysters are blue. In the second bay, 13% of the pearl-containing oysters are blue, and 26% of the non-pearl-containing oysters are blue. You created a special device that helps you find blue oysters. Would you rather harvest blue oysters from the first bay or the second bay?

You're encouraged to try to solve this problem yourself, and to refrain from looking at the answer. The answer can be found in Bayes' rule: Log-odds form.