Learning Goal
Part of: Use probability to evaluate outcomes of decisions — 1 of 3 cluster items
Weigh outcomes of a decision using expected values
**HSS.MD.B.5**: (+) Weigh the possible outcomes of a decision by assigning probabilities to payoff values and finding expected values.
**a.** Find the expected payoff for a game of chance. For example, find the expected winnings from a state lottery ticket or a game at a fast-food restaurant.
**b.** Evaluate and compare strategies on the basis of expected values. For example, compare a high-deductible versus a low-deductible automobile insurance policy using various, but reasonable, chances of having a minor or a major accident.
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HSS.MD.B.5: (+) Weigh the possible outcomes of a decision by assigning probabilities to payoff values and finding expected values.
a. Find the expected payoff for a game of chance. For example, find the expected winnings from a state lottery ticket or a game at a fast-food restaurant.
b. Evaluate and compare strategies on the basis of expected values. For example, compare a high-deductible versus a low-deductible automobile insurance policy using various, but reasonable, chances of having a minor or a major accident.
What you'll learn
- State the expected-value decision pipeline: list outcomes, assign probabilities, attach signed payoff values, compute the expected value, and weigh the result
- Recognize that a payoff is a signed value that includes the cost of acting
- Explain how HSS.MD.B.5.a (score one game) and HSS.MD.B.5.b (compare strategies) are the same pipeline applied two ways
- Interpret the sign of an expected payoff and the comparison of two expected values as decision guidance
Prerequisites
Slides
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Slides
In development
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