The expected utility theory is most useful under all of the following conditions except
A) under conditions of uncertainty.
B) when not all conditions are known.
C) when results of a policy cannot be predicted.
D) when the payoff is highest.

Question

Quizplus · Accepted Answer

The expected utility theory is most useful when dealing with uncertain situations, incomplete information, and unpredictable outcomes. It strives to maximize expected utility, which is the personal value an individual assigns to possible outcomes. Therefore, the theory is not concerned with the highest payoff but rather with maximizing expected utility.

The Expected Utility Theory Is Most Useful Under All of the Following