**Likelihood of each result times it’s result.** When making decisions, take into account Expected Value. Expected Value is the sum when you add (each possible outcome’s result x it’s likelihood). ![[assets/Untitled 12.png]] # Examples - Flip a coin, I give you $10 if it’s heads, I give you nothing if it’s tails. Expected Value: $2.50. - Flip a coin, I give you $10 if it’s heads, you give me $10 if it’s tails. Expected Value: $0 - Roll a die, if it’s a 6 I give you $60. If it’s anything else you give me $10. Expected Value: (1/6)*$60+(5/6)*(-$10) = $1.67 **** ## Source - [[The Organized Mind]] - [[Thinking Fast and Slow]] ## Related - [[Base Rates]] - [[Gambler's Fallacy]] - [[Bayes Theorem]]