Subjective probabilities
A)are used both in the case of the case of risky situations and incomplete information.
B)are not central to the use of the expected- utility approach.
C)are used in the case of incomplete information but not in the case of risky situations.
D)are used in the case of risky situation but not in the case of incomplete information.

Question

Quizplus · Accepted Answer

Subjective probabilities are used in both risky situations and incomplete information, as they are based on an individual's personal beliefs or judgments about the likelihood of an event occurring. They allow for decision-making under uncertainty and help individuals to weigh the potential outcomes of their choices. The expected-utility approach relies heavily on subjective probabilities to calculate the expected value of an uncertain outcome.

Subjective Probabilities