The value of perfect information for the problem: a sensitivity analysis

Abstract

This paper examines problems in decision theory where the number of alternatives and states of nature are finite. Previous studies have defined the concept of “the value of perfect information for the problem” (VPIP). This metric allows us to obtain an upper bound on the amount a decision-maker would be willing to pay for perfect information under the specific conditions of a problem. This bound is particularly important when the decision is unrepeatable, providing a more accurately adjusted measure than the one traditionally obtained with “the expected value of perfect information” (EVPI) (...)