Final answer:
Decision makers operate 'Under Uncertainty' when there is no probability information available, whether in state decisions, social scenarios, or insurance contexts, all of which deal with imperfect information. Particularly in insurance, companies use statistical estimates to compensate for the unpredictable nature of individual events.
Step-by-step explanation:
If probability information is unavailable, decision makers will be making decisions Under Uncertainty. This concept applies to various scenarios, including state actions, social influence, and insurance policies. When dealing with decisions under uncertainty, individuals and organizations must operate without knowing the precise likelihood of different outcomes, often making the best guess based on the information available to them. For instance, in the context of insurance, companies and policyholders deal with imperfect information because it's not possible to predict individual events with certainty. However, insurers attempt to estimate risks and set premiums based on statistical probabilities drawn from the broader population.
Similarly, in social situations, individuals may rely on informational social influence under uncertain conditions, particularly when the answer to a problem is unclear or when the group has expertise. In such cases, the likelihood of individuals aligning their decisions with the group is higher, as individuals seek to make the correct decision when they lack clear information.