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Flashcards in Uncertainty Deck (11)
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1
Q

Uncertainty is sometimes called risk when:

A

the likelihood of each possible outcome is known or can be estimated

2
Q
A
3
Q
A
4
Q
A
5
Q
A
6
Q

Expected Utility

A

The additional utility from getting £475,000 relative to 0 is huge. The addition utility from getting £1,000,000 relative to £475,000 is much smaller.

7
Q
A
8
Q
A
9
Q
A
10
Q
A
11
Q
A