A Goodman–Nguyen–van Fraassen algebra is a type of conditional event algebra (CEA) that embeds the standard Boolean algebra of unconditional events in a larger algebra which is itself Boolean. The goal (as with all CEAs) is to equate the conditional probability P(A ∩ B) / P(A) with the probability of a conditional event, P(A → B) for more than just trivial choices of A, B, and P.
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Construction of the algebra
Given set Ω, which is the set of possible outcomes, and set F of subsets of Ω—so that F is the set of possible events—consider an infinite Cartesian product of the form E1 × E2 × … × En × Ω × Ω × Ω × …, where E1, E2, … En are members of F. Such a product specifies the set of all infinite sequences whose first element is in E1, whose second element is in E2, …, and whose nth element is in En, and all of whose elements are in Ω. Note that one such product is the one where E1 = E2 = … = En = Ω, i.e., the set Ω × Ω × Ω × Ω × …. Designate this set as
A new Boolean algebra is now formed, whose elements are subsets of
Additionally, however, for events A and B, let the conditional event A → B be represented as the following infinite union of disjoint sets:
[(A ∩ B) × Ω × Ω × Ω × …] ∪ [A′ × (A ∩ B) × Ω × Ω × Ω × …] ∪ [A′ × A ′ × (A ∩ B) × Ω × Ω × Ω × …] ∪ ….The motivation for this representation of conditional events will be explained shortly. Note that the construction can be iterated; A and B can themselves be conditional events.
Intuitively, unconditional event A ought to be representable as conditional event Ω → A. And indeed: because Ω ∩ A = A and Ω′ = ∅, the infinite union representing Ω → A reduces to A × Ω × Ω × Ω × ….
Let
Definition of the extended probability function
Corresponding to the newly constructed logical objects, called conditional events, is a new definition of a probability function,
It follows from the definition of
P(A → B) = P(B|A)
Now comes the insight which motivates all of the preceding work. For P, the original probability function, P(A′) = 1 – P(A), and therefore P(B|A) = P(A ∩ B) / P(A) can be rewritten as P(A ∩ B) / [1 – P(A′)]. The factor 1 / [1 – P(A′)], however, can in turn be represented by its Maclaurin series expansion, 1 + P(A′) + P(A′)2 …. Therefore, P(B|A) = P(A ∩ B) + P(A′)P(A ∩ B) + P(A′)2P(A ∩ B) + ….
The right side of the equation is exactly the expression for the probability