Asked by Shermin Madani on Jul 25, 2024
Verified
Expected utility theory is usually regarded as a ______ model of decision making.
A) descriptive
B) prescriptive
C) normative
D) both descriptive and prescriptive
Expected Utility Theory
A normative model of decision making in which the decision maker weighs the personal importance and probabilities of different outcomes in choosing among alternatives in order to maximize overall satisfaction of personal goals.
Prescriptive
Relating to the imposition or enforcement of rules, norms, or recommendations, often in a directive way.
- Interpret the rationale behind normative and descriptive models of decision making.
Verified Answer
HB
Hannah BakerJul 30, 2024
Final Answer :
C
Explanation :
Expected utility theory is considered a normative model of decision making because it prescribes how decisions should be made based on rational criteria, rather than describing how decisions are actually made.
Learning Objectives
- Interpret the rationale behind normative and descriptive models of decision making.
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