Solution

ID: past-exam-of-the-mathematics-course-of-the-university-of-cambridge/2018/ib/paper-4/19h/solution

With the uniform prior, the binomial likelihood gives the Beta distribution posterior . Under squared-error loss, the Bayes estimator is the posterior mean:
The production manager's prior gives posterior density proportional to . Minimizing gives the weighted posterior mean
using the supplied beta function. Cross multiplication shows exactly when , so it is greater unless .

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