The decision maker-although not certain-is aware of the chances,or probabilities,of the various states of nature occurring.This statement relates to which of the following scenarios?
A)decision under certainty
B)decision under uncertainty
C)decision under state of nature
D)decision under risk

Question

Quizplus · Accepted Answer

In decision making under certainty, the decision maker knows with certainty the outcome of each possible decision or action. In decision making under uncertainty, the decision maker does not have any information about the possible outcomes or probabilities of the states of nature. Decision making under state of nature is not a commonly used term. In decision making under risk, the decision maker has some knowledge or information about the probabilities associated with each state of nature. Therefore, the statement in the question relates to decision making under risk.

The Decision Maker-Although Not Certain-Is Aware of the Chances,or Probabilities,of