The Value of Sequential Information

Abstract

In decision analysis it is normal to consider the value of information to be a constant against which the cost of information is compared. However, when it is possible to buy information sequentially, the value of information is not a constant. Rather, it is a function of the prices of the various pieces of information, or observables. When one is faced with a decision and learn one observable, this information not only helps to make the original decision, but also helps to decide if more should be paid for the observables. For this reason, the first observable has a value above and beyond that which would be assigned if there were no possibility of obtaining additional information. To decide whether or not to buy one observable the prices of all the observables must be known.

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Document Details

Document Type
Technical Report
Publication Date
Jan 31, 1974
Accession Number
AD0776610

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  • Allen C. Miller Iii

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  • Stanford University

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