When reading chapter 8, I actually found it really engaging. It talks about sports gambling and the math behind it. First, Silver delves in Baye’s theorem:

• First, estimate the probability of the hypothesis being true.
• Then, you estimate the probability of the hypothesis being false
• Lastly, Prior: What is the probability of your hypothesis being true prior to your hypothetical condition.

Confusing? Well basically here’s the scenario:

Hypothesis: Cavs are going over on the total because Davis is in a contract year and is playing at a fast pace to improve statistics.

Prediction: Davis’s incentives wont change until the end of the season. He’ll continue to play at a fast pace and the future Cavs games will continue to be high scoring.

You then place your bet using Baye’s Theorem, and watch your bank account grow exponentially.

-George Basaly