A biased coin is tossed.
Probability of Head - $\frac{1}{8}$
Probability of Tail - $\frac{7}{8}$
A liar watches the coin toss. Probability of his lying is $\frac{3}{4}$ and telling the truth is $\frac{1}{4}$. He says that that the outcome is Head. What is the probability that the coin has truly turned Head?
My Attempt:
I used the formula: $$P(A \mid B) = \frac{P(A\cap B)}{P(B)}$$
$\ \ \ \ \ \ $P(it is head GIVEN liar said it's head) = P(it's head AND liar said it's head) / P(liar said it's head)
or, P(it is head GIVEN liar said it's head) = $\frac{ \frac{1}{8} \frac{1}{4} }{ \frac{7}{8}\frac{3}{4} + \frac{1}{8}\frac{1}{4} }$ [using a probability tree will be helpful here]
or, P(it is head GIVEN liar said it's head) = $\frac{1}{22}$
The Question: Is the method I used wrong in any way? Some others I have talked to are saying the answer will be $\frac{1}{4}$. Their reasoning is this: since the liar lies 3 times out of 4 and he said it is head, then the probability of it being head is 1/4. So who is right? What will be the answer?
You're correct, an easy way to check this is by writing out the possible outcomes. In a perfect world, if we flip the coin 32 times the following will happen:
Since it is given that the liar said head there are 22 options left over, only one of which has the coin actually landing head.
I know this is not the proper way of solving this, but I always found it useful to write things out like this when I was getting confused about conditional probability.