# Subjective expected utility theory

Subjective expected utility theory

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• Subjective expected utility (SEU) theory is a prescriptive theory of decision making that grew out of economics. The translation of economic concepts to medicine has a number of problems. Although SEU can assist with overcoming some of these problems, the value of SEU is primarily in helping the decision maker to structure the decision. Key concepts in SEU are decision making under risk, utility, and probability. These concepts will be briefly described first.

Key Concepts
Decision Making under Risk

Decisions are normally choices between alternatives with different probabilities. Even if one chooses an alternative with a sure outcome, one risks rejecting an alternative with some chance of a better outcome. An important understanding is that whether a given decision is viewed as good or bad is not dependent ...

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