🎯 In a world of decision-making, there's a powerful concept that's been helping me decide: Expected Value (EV) 📊
💡 EV = Magnitude of the Outcome(s) x Probability of the Outcome(s)
⇒ EV = (Outcome 1 x Probability 1) + (Outcome 2 x Probability 2) + ...
💬 Example (simplified and relatively zero-sum):
Should I play in the Lottery?
1. It costs 3€ for 1 bet ⇒ 5 numbers and 1 number
2. Winning the lottery would give me 20M€ and has a Probability of 0,00000033%.
3. EV = 0,06€ for every 3€ bet. If we equate all of the secondary prices
=> EV = 0,31€
➡️ Decision:
Since 0,31€ < 3€ ⇒ if everytime I encounter this decision, I go for betting in the lottery, it means a NEGATIVE EV
🎰 EV isn't about predicting the future; it's about harnessing the wisdom of probabilities to make smarter choices. When we weigh potential outcomes and their associated probabilities, we pave the path to more informed decisions.
🚀 Vital in uncertainty, with fluctuating and imperfect information, as is working in the sports medicine field. A cornerstone of Bayesian thinking, it quantifies risks and rewards, offering strategic advantage when deciding in complex situations.