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MENTAL MODEL · M12815

Expected Value

Expected Value
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

The weighted average of outcomes multiplied by their probabilities, capturing the essence of high-variance paths.

SCAFFOLDING EFFECT

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In probability theory, the expected value (also called expectation, mean, or first moment) is a generalization of the weighted average. Provided that it is finite, the expected value can be interpreted as the long-run average of results from independent repetitions of the same random experiment, as …

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The expected value is the weighted average of each outcome value by its probability, reflecting the long-term average return under uncertainty; it integrates 'probability × outcome' into a single comparable quantity, correcting probability blindness.

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Source support: Explicit

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    en.wikipedia.orghttps://en.wikipedia.org/wiki/Expected_valueZH · Explicit
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