Bayesian Bandits explained simply

Exploration and Exploitation play a key role in any business.

And any good business will try to “explore” various opportunities where it can make a profit.

Any good business at the same time also tries to focus on a particular opportunity it has found already and tries to “exploits” it.

Let me explain this further with a thought experiment.

Thought Experiment: Assume that we have infinite slot machines. Every slot machine has some win probability. But we don’t know these probability values.

You have to operate these slot machines one by one. How do you come up with a strategy to maximize your outcome from these slot machines in minimum time.