Question

Two hairdressers work in Robert's salon. Robert and Billy Each customer has a 60% chance go...

Two hairdressers work in Robert's salon. Robert and Billy Each customer has a 60% chance go being served by Robert, and a 40% chance each of being served by Billy. Customers receive a utility of 10 from being served by Robert, and of 5 of being served by Billy.
What is the expected utility for a customer at Robert's salon?

Math   Statistics-And-Probability   
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Answer #1

Expected Utility for a customer at Robert's salon is calculated as weighted average of the utilities of each of it's possible outcomes.

Outcome A: Customer being served by Robert : Probability of this outcome, P(A) = 60%

Outcome B: Customer being served by Billy: Probability of this outcome, P(B) = 40%

Number (Utility) Weighting Factor (w) Number*Weighting Factor
Robert 10 0.6 6
Billy 5 0.4 2
Weighted Average 8

Expected Utility E(U) = [10*0.6 + 5*0.4] = 6+2 = 8

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