Concept · Foundations

Expected Value

The probability-weighted average of an action's possible outcomes, computed as EV = sum over outcomes of probability times payoff.

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Why it matters

Expected value is the starting point for evaluating any choice whose outcome depends on chance, and it generalizes straightforwardly to expected utility.

Where this shows up

Units and lessons using this concept

Following the links will take you to the page where this term is introduced in context.

Units (1)

Decision Theory: Choosing Under UncertaintyStudents learn the logic of rational decision making under risk and uncertainty, including expected value, utility, decision matrices, do…

Lessons (4)

Capstone: Decisions Under Real UncertaintyDecision Theory: Choosing Under Uncertainty Decision Matrices and DominanceDecision Theory: Choosing Under Uncertainty Expected Value and Expected UtilityDecision Theory: Choosing Under Uncertainty What Makes a Decision Rational?Decision Theory: Choosing Under Uncertainty

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