BAYES RULESbayes rules

_______(2006) THE ECONOMIST/ 1/7/70-71

Bayes an economist reasoned that individuals have a few choices to make in selection of products or services. That became conventional wisdom for many years. However, it was challenged when new economists indicated that populations have numerous choices in the market place, thus Bayes was wrong.

However today, Bayes rule makes sense because consumers are in a hurry and may be bombarded due to time constraints with just a few choices. Or, they have over choice of too many to choose from and thus quickly in a non-rational way make a choice from just a few considerations.

Thus, economist now are going dual track. One is based on Bayes and the other on numerous choices with many strange names. It appears in the real world Bayes seems to be the most

appropriate. You could choose from the many, but you choose from a few.