The states of nature are defined so that they are collectively exhaustive.
Explanation:
The state of nature explains the life of the people before the existence of society. It provides the possible outcomes for events that affect the significance associated with the alternate decision. The states of nature are defined so they are mutually exclusive and collectively exhaustive. Only one possible states of nature will occur at a time.
An outcome denotes the obtained result which occurs on choosing the alternative decision and getting a chance event. The information about the state of nature is specified with the help of indicator.
