The Expected Value Foundation

Welcome!

• expectedvalue.org: Learn about expected value
• Poker Camp: In-person workshops and courses on AI poker and applied rationality

In the works:

• Expected value workshops
• One Life Pledge and poker tournament
• Expected Value Day
• Micro-grants
• EV Fellowship

What is Expected Value (EV)?

Expected Value = (Probability of an outcome) × (Value of that outcome)

Imagine a raffle where:

• You buy 1 ticket for $1
• There is a 1 in 100 chance of winning
• The prize is $150

To calculate the expected value:

• Probability of winning: 1/100 = 0.01
• Value of winning: $150
• Expected Value = 0.01 × $150 = $1.50

This means that, on average, each ticket is “worth” $1.50.

Since the ticket costs $1, and its expected value is $1.50, it’s a good deal in the long run. However, remember that this doesn’t guarantee you’ll win – it’s an average over many tries.

This simple calculation helps you make decisions by weighing the likelihood of outcomes against their potential value. It’s a basic tool for comparing options with different risks and rewards.