Expected value

Expected value — the probability-weighted average of an outcome: each scenario’s payoff times its likelihood, summed. It kills lottery-style pitches (huge advertised payoff × tiny honest probability = small EV) and disciplines optimism. The non-negotiable caveat: expected value only rules among survivable bets — no EV justifies risking the rungs that keep your family fed, because a ruined player doesn’t get to keep playing the averages.

First used in: 1.8 · Risk: what you’re actually paid for