Utility theory may help the decision maker include the impact of qualitative factors that are difficult to include in the EMV model.

Question

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Utility theory is a decision-making approach that takes into consideration both the expected monetary value (EMV) of an option as well as the decision maker's personal preferences and satisfaction (utility) associated with the outcomes. It allows the decision maker to incorporate qualitative factors, such as personal values or emotions, that are not easily quantifiable in the EMV model.

Utility Theory May Help the Decision Maker Include the Impact