The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Question

​The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Quizplus · Accepted Answer

The expected monetary value (EMV) approach and the expected utility (EU) approach to decision making typically lead to the same decision choice because they both consider the expected value of the outcomes. However, in cases where the payoffs are extreme, the EU approach may result in a different decision choice than the EMV approach, as it takes into account the decision maker's risk tolerance.

​The Expected Monetary Value Approach and the Expected Utility Approach

The Expected Monetary Value Approach and the Expected Utility Approach