 Solution

Bayes' theorem updates prior knowledge using the likelihood of new observations. For alternative hypotheses $H_j$,The prior $P(H_j)$ describes information before the data $D$; $P(D\mid H_j)$ is the sampling likelihood, and the posterior $P(H_j\mid D)$ describes the updated probabilities. Posterior odds equal prior odds times the likelihood ratio. A likelihood is a probability model for data at specified parameters, not automatically a normalized probability distribution over those parameters.

For a continuous parameter $\theta$, the same rule uses densities: $\pi (\theta \mid D)=L(D\mid \theta )\pi (\theta )/\int L(D\mid u)\pi (u)du$. Priors can encode positivity, physical limits, previous independent measurements or calibration knowledge. Their parameterization matters: a density uniform in a rate is not uniform in its logarithm. Proper priors make model evidences well defined; an arbitrary normalization in an improper prior is especially problematic for comparing models.

A counting example uses Poisson-gamma conjugacy. If a detector registers $K$ events in exposure $t$ with constant rate $\lambda$, $L\propto {\lambda }^K{e}^{-t\lambda }$. A gamma prior with shape $\alpha$ and rate parameter $\beta$, $\pi (\lambda )\propto {\lambda }^{\alpha -1}{e}^{-\beta \lambda }$, givesThe posterior mean combines the prior rate $\alpha /\beta$ with the observed rate $K/t$, weighted by the prior and actual exposures. The parameters must use a consistent shape-rate convention. Small counts can leave substantial prior sensitivity; abundant informative data usually reduce it for regular identifiable models.

Independent old data can become the prior for a new experiment, giving the same result as joint updating under a consistent model. The new data must not also have been used to construct that prior, or the evidence is counted twice. A credible interval has a specified posterior probability under the chosen model and prior; this interpretation differs from repeated-sampling coverage of a confidence interval. Predictions for a future observation average its sampling distribution over the posterior, incorporating parameter uncertainty. Prior sensitivity checks and a defensible likelihood are therefore part of the inference, rather than Bayes' theorem itself supplying missing physical knowledge.