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The Complete Idiot's Guide to Game Theory by Edward Rosenthal, Ph.D., Edward C. Rosenthal

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The Not-So-Average World of Averages

The innocent-sounding term “average” is actually a complex concept with multiple definitions and implications. Averages take some time to fully grasp, and you need a solid understanding of them because they are the most important tools in your arsenal.

Simple Averages

Most people treat the term “average” as a shortcut to describing some sort of group characteristic. You probably already know how to compute simple averages: you add up all the figures and divide the sum by the total number of terms. If the eight entrées at your favorite little café cost $18, $24, $15, $20, $19, $25, $16, and $19, the average price is: (18 + 24 + 15 + 20 + 19 + 25 + 16 + 19) divided by 8, which equals $19.50.
But what if ...

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