Questions: The three decision-making environments are decision making under a. utility, risk, and certainty b. utility, risk, and uncertainty c. utility, certainty, and uncertainty d. utility, equity, and certainty e. risk, certainty, and uncertainty

Solution Steps

• Recognize the key concepts involved in decision-making environments: utility, risk, certainty, and uncertainty.

• Review each option provided:
  • a. utility, risk, and certainty
  • b. utility, risk, and uncertainty
  • c. utility, certainty, and uncertainty
  • d. utility, equity, and certainty
  • e. risk, certainty, and uncertainty

• Determine which combination of concepts accurately represents the three decision-making environments:
  • Decision making under risk involves known probabilities.
  • Decision making under certainty involves known outcomes.
  • Decision making under uncertainty involves unknown probabilities.

Final Answer