Question

In decision making under different conditions, what is the difference between risk and uncertainty?

• A. Under risk, information is reliable; under uncertainty, it is not.
• B. Under risk, choices are clear and the chances of different outcomes can be measured; under uncertainty, neither applies.
• C. Under risk, there is a well defined problem; under uncertainty, the definition is unclear.
• D. Under risk, probabilities can be measured; under uncertainty, probabilities cannot be measured.

Answer 1

Answer: (B)

Under risk, choices are clear and the chances of different outcomes can be measured; under uncertainty, neither applies.

In decision making under different conditions the different between risk and uncertainty is that under risk, choices are clear and the chances of different outcomes can be measured, under uncertainty neither of it implies.