What aspect of decision-making does expected value focus on?

Expected value focuses on an optimal decision criteria by providing a way to evaluate and compare different possible outcomes of uncertain events. It quantifies the average outcome that one can expect if a decision is repeated multiple times under the same conditions, allowing decision-makers to assess different strategies in terms of anticipated returns or losses.

In making decisions under uncertainty, expected value serves as a rational basis for selecting among various alternatives by weighing the potential benefits against their probabilities. This allows decision-makers to choose the option with the highest expected value, which is essential for effective risk management and maximizing expected utility in uncertain situations.

Other factors like randomness in outcomes, cost-effectiveness analysis, and historical precedent can influence decision-making, but they do not provide the same structured method for evaluating and comparing probabilistic outcomes, which is the hallmark of expected value methodology.