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Statistical Problem Solving: Stimulation

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What is the role of simulation in statistical problem solving? Can you provide two examples of simulation in SPS? What are the limitations of stimulation in SPS?

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Solution Summary

The role and methodology of stimulation in statistical problem solving is explained, as well as two examples. Some limitations of stimulation are identified.

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Using simulation to Estimate probabilities

Simulation

A simulation is a method for obtaining the experimental probabilities for various outcomes of an experiment by running a large number of replications of a similar statistical experiment whose outcomes should have the same probabilities as those we wish to measure.

By observing the relative frequencies of the outcomes in the simulation, we can estimate the probabilities we seek to measure.

There is no way we can ever be sure that an experiment is behaving in a typical way, and so we never know when an experimental probability is a close approximation to the corresponding theoretical probability.

But, as we increase the number of replications of the simulation, we reduce the chances that such an aberration will occur.

Some probabilities are so difficult or time consuming to calculate that it is ...

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