Bayes's Theorem Application For Market Risk On Development Of New Medicine

Following the global economic integration, People's decision making more and more depend on decision-method. The biggest characteristic of Bayes's theorem is that it can integrate all .the received information to get posterior function. And make use the posterior function to make decision, which is just my thesis's motivation. Firstly, I trace back to the bayes's theorem in my thesis. I present the process of making decision on Bayesian method in detail and its application. I further present the traditional decision-making of bayes's theorem using respectively two group information got through market investigation. I find that the difference between their expected profits is trivial and they are both worth buying, in addition these two group information make the great difference in predicting market demand. It makes the decision-maker be in the dilemma. The scheme of my thesis is employed how the decision-maker obtain the max profit-expected based on profit-expected and information accuracy.To solve this problem the thesis introduce the newestimator ?entropy. Through the entropy I obtain the new posterior function, which is formed from the sample function and the prior function. And decision-maker can be easy to make correct decision using the posterior function...