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The possibility of more than one outcome resulting from a particular course of action, the form of each possible outcome being known but the chance or probability of one particular outcome being unknown. Uncertainty differs from risk, in that under conditions of risk it is possible to know the probability of a particular outcome. For example, in tossing a coin the probability of heads coming up is 50 per cent, so betting on the toss of a coin is a risk. Playing Russian roulette is a risk if the pistol is known to be loaded; with a bullet in one of the six chambers there is a one-in-six probability of death with any shot. However, if it was not known whether the gun was loaded, this would be a situation of uncertainty .
Uncertainty is part of the environment within which location (and other) decisions are made. This greatly limits the practical value of theories and models that assume perfect knowledge. For example, the firm setting up a new factory or service outlet in a new territory cannot know what the reaction of competitors is likely to be. They may follow suit with new facilities of their own, they may find an alternative competitive strategy, or they may choose not to compete: there is no way of calculating the probability of each option. Residential choice is similarly made under conditions of uncertainty — for example, with respect to the stability of the neighbourhood or the sociability of the neighbours. (DMS) |
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