What is the expected usefulness?

Expected usefulness is a theory commonly used in the theory and economy of games. It is a statistical measurement of the likelihood of a good result for a risky decision. "Utility" is a relative measurement of satisfaction with the result. For example, consider a person who is offered two jobs. Job A offers a higher salary, but there is a 50 % chance of having to move to an undesirable location; Job B offers a much lower salary, but it will not have to move. Considering the possibilities to make a decision is an example of the expected usefulness. Good examples are also a decision to participate in lotteries and other situations of gambling.

Expected usefulness is a weighted diameter; If you want to calculate it, multiply the usefulness of any possible result of the probability that this result actually takes place. So if there is a 50% chance of making $ 10 (USD) and a 50% chance of making money, the expected usefulness is $ 5. If the second procedure had the expected usefulness of $ 3, then the ST Firections would be a logicMoic choice because it has a higher expected usefulness.

The economy usually assumes that people act rationally, which makes decisions that have the highest expected usefulness, but this assumption is problematic. Many problems that represent the theory of games such as the "prisoner's dilemma" have said people in a situation where if each acts individually to increase the expected usefulness, none of the participants will receive a good result. If the participants were allowed to communicate and participate, they could plan a better overall result for all participants; However, this type of communication is usually disabled in a statement of the problem.

The situation changes if the player interacts for a long time. A longer period of time requiring a number of decisions allows participants to experiment with cooperation and continue cooperation, the publishing participants are returning. Communication is not necessary for this strategy to succeed. In this situation is expected uThe rye of cooperation and giving other players the opportunity to cooperate, because long -term profits of cooperation predominate over short -term losses caused by a short deviation from the strategy of non -cooperation. Determination of the best overall strategy, the best combination of cooperation and non -cooperation is an open problem. Some economic departments even organize competitions "prison dilemma" that allow people to test their strategies against each other.