Making a decision under risk using the expected value criterion is the equivalent of using the Laplace decision rule under uncertainty.

Question

Quizplus · Accepted Answer

This is true. The expected value criterion is a decision rule used when probabilities are known, while the Laplace decision rule is used when probabilities are unknown (i.e. under uncertainty). However, in both cases, the decision is based on maximizing the expected outcome.

Making a Decision Under Risk Using the Expected Value Criterion