| title |
Bayesian Option Value |
Given a distribution for $F$ and option values, how do we compute the posterior distribution.
$P(AB) = P(A)P(B|A) = P(B)P(A|B)$
$P(A|B) = P(A)P(B|A)/P(B)$.
$P(X = x) = q^x(1-q)^{1-x}$, $x\in{0,1}$, $0\le q\le 1$.
$P(X = x|X_1 = x_1) = P(X = x)P(X_1 = x_1|X = x)/P(X = x)$