Text 1: Decision theorist Dr. Maria Chen defends expected utility maximization. "Rational agents should choose options maximizing expected utility across possible outcomes," Chen writes. "Probability-weighted preferences determine optimal action."
Text 2: Economist Dr. Paul Black studies low-income decision-making. "The poor often can't afford to maximize expected value," Black observes. "When one bad outcome means catastrophe, avoiding worst cases takes priority. Risk-minimization trumps expectation-maximization."
What circumstance does Black identify where Chen's optimality criterion may not apply?
Decisions where probabilities cannot be assigned
Decisions where potential losses create catastrophic, asymmetric consequences
Decisions with no possible outcomes
Decisions made by perfectly rational agents
Correct Answer: B
Choice B is the correct answer. Chen's maximization assumes outcomes are commensurable. Black notes for the poor, "one bad outcome means catastrophe"—asymmetric stakes where worst-case avoidance dominates expected value.
- Evidence: Black: avoiding worst cases takes priority.
- Reasoning: Catastrophic downside changes rational strategy.
- Conclusion: Asymmetric consequences limit expected utility criterion.
Choice A is incorrect because probabilities aren't Black's issue. Choice C is incorrect because Black discusses poor outcomes. Choice D is incorrect because Black challenges optimality criterion.