3 ms·

EV, enterprise value?

• teknofobi 4y ago
  Expected value https://en.wikipedia.org/wiki/Expected_value https://en.wikipedia.org/wiki/Expected_value
• hengheng 4y ago
  Expected Value as in poker lingo, but I first read it as electric vehicle myself.
  • gpderetta 4y ago
    EV is really a general statistic term.
    • anm89 4y ago
      Agreed. I'm not interested in Poker at all so that's not where I got this from. This is taught in undergrad economics classes.
• anm89 4y ago
  roughly, imagine a decision tree where each end node has a set of probabilities and a utility points values per outcome probability. You multiply out the probability of each outcome with it's point value and pick the decision path which maximizes your probability weighted outcome. In most cases utility points equals how much money you make or lose but it doesn't have to be that. So if one path has a 10% chance of -100000 points (ie something terrible happens) and a 90% chance of get 1000 points (something very good happens) this path has an expected value of (.1 * -100000) + (.9 * 1000) = -9100 whereas some other branch has a 100% chance of an outcome of 10 points. You take the branch where you get the guaranteed 10 points because even though the best case is on the other branch, the average case on that branch is worse than on the 10 point branch. And what I'm saying is they decided that their highest average payoff as doing some compromised version of self allowed diy whereas they get a really bad payoff in the case where the diy legislation is written externally and actually forces them to allow reasonable diy