Companies that do business over Internet can often obtain probability information regarding Web site visitors from previous Web sites visited. For example, the Q.M. in Action, Internet Marketing, stated how clickstream data on Web sites visited could be employed in conjunction with Bayesian updating scheme to find out the probability that a Web site visitor was female. Par Fore created a Web site to market golf equipment and apparel. Management would like the certain offer to appear for female visitors and a different offer to appear for male visitors. A sample past web site visits points out that 60% of the visitors to Parfore.com are male and 40% are female.
a. What is your prior probability that next visitor to the Web site will be female?
b. Assume you know that the current visitor previously visited the Dillards Web site and that women are three times as likely to visit this Web site as men. What is your revised probability that visitor is female? Should you display the offer that has more appeal to female visitors or the one that has more appeal to male visitors?