Posted: October 22nd, 2022
We are hardly presented with venture situations which are absolutely certain. Instead, we normally have chancy decision-making situations, where we only have approximate idea concerning the probability that an outcome will occur. Important to note is that when we are making decisions in uncertainty, we hardly know the likelihoods of each outcome conclusively. We could be estimating the probabilities, probably unconsciously. However with risky decision making situations, it’s much easier to make those decisions using a single criterion; that criterion in business is regularly monetary. We establish the outcome or the payoff for all possible futures or alternatives, and the likelihood of their occurrence. In this report we use the expected value model in making decisions.
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