Expected utility theory requires that people
A) assess probabilities in an unbiased manner
B) obey all of the theory's axioms for assigning utilities to outcomes
C) Both answers are correct

Question

Quizplus · Accepted Answer

Both answers are correct. Expected utility theory requires that people assess probabilities in an unbiased manner and obey all of the theory's axioms for assigning utilities to outcomes. Failing to comply with either of these requirements can result in irrational decision-making.

Expected Utility Theory Requires That People