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The option with the greatest expected utility will then simply be that which has the largest expected profit associated with it, and that option, according to the rule of maximizing expected utility, will be the optimal choice.
The rule of maximizing expected utility represents a consequentialist form of reasoning, in which actions are judged solely in terms of their potential outcomes.
Many philosophers have questioned whether the rule of maximizing expected utility represents an adequate or complete guide to decisions, particularly with regard to decisions of an ethical nature.
The concept of expected utility and the rule of maximizing expected utility have wide application to decisions in business contexts, including those involving insurance, capital expenditures, investment, marketing, and operations.
The agent may doubt that she chooses by maximizing expected utility.
These examples suggest that maximizing expected utility is not necessary for rationality.
Similar(44)
Why choose acts that maximize expected utility?
The optimal decision maximizes expected utility.
If expected utilities are partition-sensitive, then acts that maximize expected utility may be partition-sensitive.
Further questions arise about the plausibility of the normative requirement to maximize expected utility.
An option is self-ratifying if and only if it maximizes expected utility given its realization.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com