Statistical reasoning involves assessing probabilities and making informed decisions based on observed data.

It utilizes tools like

• Bayes' theorem
• causal networks
• belief networks

to navigate uncertainty.

For example, in determining a patient's likelihood of having inhalational anthrax.

→ observed symptoms contribute to our belief

→ and additional diagnostic information further refines our understanding

→ acknowledging the inherent uncertainty in medical diagnoses.

Statistical reasoning provides a methodology for making sense of uncertain situations through the lens of probability and evidence.

Source of Uncertainty

• Uncertain inputs
  • missing and/or noisy data
• Uncertain Knowledge
  • Multiple causes lead to multiple effects
  • Incomplete enumeration of conditions or efforts
  • Probabilistic/stochastic effects.
• Uncertain outputs

Decisions making with Uncertainty

Rational Behaviour

Principle of Maximum Expected Utility

• For each possible action, identify the possible outcomes
• Compute the probability of each outcome