Concept · Foundations

Risk versus Uncertainty

Risk refers to situations where the probabilities of outcomes are known or estimable; uncertainty refers to situations where those probabilities themselves are unknown or contested.

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Why it matters

The distinction matters because expected-value calculations work cleanly under risk but require additional tools (robustness, minimax, scenario analysis) under genuine uncertainty.

Where this shows up

Units and lessons using this concept

Following the links will take you to the page where this term is introduced in context.

Units (1)

Decision Theory: Choosing Under UncertaintyStudents learn the logic of rational decision making under risk and uncertainty, including expected value, utility, decision matrices, do…

Lessons (2)

Decision Matrices and DominanceDecision Theory: Choosing Under Uncertainty What Makes a Decision Rational?Decision Theory: Choosing Under Uncertainty

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