In terms of decision theory, an occurrence or situation over which the decision maker has no control is called a(n):
A) decision under uncertainty.
B) decision tree.
C) state of nature.
D) alternative.
E) EMV.

Question

Quizplus · Accepted Answer

A state of nature is an occurrence or situation over which the decision maker has no control. This terminology is used in decision theory to differentiate between the different potential outcomes that could result from a decision. A decision under uncertainty refers to a situation in which the decision maker has incomplete information about the likelihood or outcome of different options. A decision tree is a visual representation of potential decisions and their likely consequences. An alternative is an option or choice that a decision maker can choose between. EMV (expected monetary value) is a statistical calculation used to predict the monetary value of different outcomes based on their probability of occurring.

In Terms of Decision Theory, an Occurrence or Situation Over