Which equation represents the way complex, multicomponent decisions would be made according to utility theory?
A) Expected value = [(probability of outcome 1) (utility of outcome 1) ]
[(probability of outcome 2) (utility of outcome 2) ]
B) Expected value = [(probability of outcome 1) (utility of outcome 1) ] +
[(probability of outcome 2) (utility of outcome 2) ]
C) Expected value = [(probability of outcome 1) (utility of outcome 1) ] -
[(probability of outcome 2) (utility of outcome 2) ]
D) Expected value = [(probability of outcome 1) (utility of outcome 1) ] ÷
[(probability of outcome 2) (utility of outcome 2) ]
Correct Answer:
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