Expected Values in Life
In statistics, expected values (EVs) are the product of each of the possible outcomes by the probability that each outcome will occur and then summing those numbers.
For example, say that each time you flip a coin, heads gets you $10 and tails gets you $0. Your EV would be $5 since there’s a 50% chance you will earn either $10 or $0, and $10 * 0.5 + $0 * 0.5 = $5.
All of our daily decisions have EVs. If we spend 10 minutes going for a run, there are many possible outcomes, including soreness, enjoyment, euphoria, getting injured and getting fitter. Importantly, the likelihood and the desirability of each individual outcome is on a case-by-case basis. A child just learning to walk may have vastly different EVs compared to a seasoned marathoner. The child may be likely to hurt themselves and cry if they attempt to run whereas the marathoner may enjoy it since they have developed it as an expertise and it is part of their lifestyle.
It’s fun to think about the different things we do and the EVs we can hope to get from each. For example, writing is one of my activities with the highest EV. There are very little outcomes that are bad but many that are amazing, such as developing clarity of thought and connecting with readers. Even though the likelihood of the amazing is fairly low, all things considered writing ends up having a high EV.
Being considerate of people is another activity with a high EV. If you like to treat others with respect, smile regularly and remember details, the likelihood of a bad outcome is low. You will probably get better outcomes than if you were an asshole. And over time, the accumulation of these acts may reward you.
How would our lives change if we strived towards high EVs, activities that would challenge us and push us towards positive change, and dumped our low EVs, activities that keep us dormant and perhaps even make us regress a little?
I think it would be quite the experiment.
2 thoughts on “Expected Values in Life”
Intriguing post again Eric 🙂 It’s really cool to think of what we do in terms of expected values – but to extend this further we could also take into account the effort it takes of each of our the decisions – kind of like the ratio of EV/effort, where the higher the ratio of EV/effort, the more of a ‘no brainer’ that decision will be. For example, treating others well, smiling warmly to them, and remembering details has a high EV, and requires little to low effort, and so are ‘no brainer’ actions to do. On the other hand, there are some decisions that are momentous that also have a high EV, but requires much effort (like a career change) which will require careful consideration as to whether or not we should to undertake this decision. Anyways, thanks again Eric 🙂
Very cool thought Bryan – aiming for high EV/effort ratio activities certainly seem more sustainable and would do much good. I also wonder if there is some direct correlation between EV and effort, with higher effort activities rewarding you with higher EVs overall. Fun to think about!