Question

You have three options for the evening.

1. You could watch some sitcoms on TV that you are certain to enjoy and that will provide you with a pleasure rating of 4.

2. You could go to a movie that is supposed to be good. You would enjoy the movie with probability 0.5; if you enjoy it, it will provide you with a relative pleasure rating of 11, but if you don't enjoy it, it will provide you with a negative rating of -2.

3. You could go on a date. With probability 0.3 you will experience a pleasure rating of 21, and a probability of 0.7 the date will provide a negative rating of -2.

Discuss what you would do.



What are the expected values of pleasure for these individual activities?

TV expected value = ?

Movie expected value = ?

Date expected value = ?

Answer 1

Expected value of pleasure for sitcoms = 1*4 =4

Expected value of pleasure for movie = 1/2 * 11 + 1/2 * (-2) = 4.5

Expected value of date = (0.3*21) + (0.7*-2) = 4.9

I would go for a date as its expected value is high.