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malfutka [58]
2 years ago
8

A preference for known risks over unknown risks is best described as follows

Social Studies
1 answer:
Greeley [361]2 years ago
5 0

Answer: Ambiguity aversion

Explanation:

In economics and decision theory in general, ambiguity aversion refers to the preference for known risks over unknown risks. This means that in a scenario in which there´s an option in which probable outcomes are unknown, people would rather choose an option in which probable outcomes are known.

No to be confused with risk aversion, which only applies to situations where each probable outcome can be established.

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