Expected Value of Game
Expected Value of Game
- How much do you think you can expect to win in this game?
- EV(X) = Sum over all i {xi p(x i)}
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Expected Utility of Game
- Daniel Bernoulli (1739)
- Utility of wealth is not linear, but logarithmic
- EU(X) = Sum over all i {u(xi) p(x i)}
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Other decision rules???
- Minimum return (pessimist) rule:
- pay no more than you can expect to get back in the worst case
- Expectation heuristic (Treisman, 1986):
- Figure on what trial you can expect to get the first H and pay no more than you will get on that trial
Single vs. multiple games
- Does it make a difference?