Expected second-stage costs

The above stochastic model takes a decision merely based on first-stage and expected second-stage costs leading to an assumption that the decision-maker is risk-neutral. The generic representation of risk can be written as ... 

The corresponding expected recourse penalty for the second-stage costs is given by ... 

All those equations involving recourse decisions y are taken into account in Q. As it can be seen, 2 is a mathematical program that minimizes the second-stage cost for a given value of the uncertain parameter f. Then, the expected recourse function the mathematical expectation of Q, is defined by the expression (A. 18). 

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