Hi,
Great article Celia. I'd also add in another feature of networks and that of repeated events. Probably best to explain by an example. Let's say we have 5 linked motor insurance claims on a network and all 5 occur at night. From our past records only 25% of claims occur at night. If we assume independence of events then the probability of all 5 claims being at night = (0.25)^5 = .001 (or around 1 in 1000). You can use the binomial distribution for 0,1,2,3 &4 claims at night.
The independence assumption is quite strong and probably OK in this case [though you may be able to think of exceptions e.g. maybe all night time shift staff etc.], in other cases may not work as well.
Good luck with your analysis.
Colin
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