What does the expected value represent in probability?

The expected value is a fundamental concept in probability and statistics that provides a measure of the central location of a probability distribution. It can be viewed as the long-run average outcome of a random variable when an experiment is repeated many times under the same conditions. Mathematically, it is calculated as the sum of all possible outcomes weighted by their respective probabilities.

This characteristic makes expected value particularly useful for decision-making, as it allows individuals and organizations to evaluate the average result they can anticipate from various choices, helping to inform whether certain actions are more favorable than others in the long run. Thus, it serves as a key indicator in determining the overall effectiveness of strategies based on probabilistic outcomes.