The Economics of Decision Making

Abstract

This paper addresses the class of decision problems where the value function is approximately quadratic in both decision and state variables. The main result is that the value of an experiment depends only on the prior variance of the posterior mean. This is a tremendous simplification over the general case where the value of information depends on the prior probability distribution of the posterior probability distribution.

Open PDF

Document Details

Document Type
Technical Report
Publication Date
Aug 31, 1974
Accession Number
AD0786756

Entities

People

  • Thomas Richard Rice

Organizations

  • Stanford University

Tags

DTIC Thesaurus Topics

  • Classification
  • Coding
  • Covariance
  • Economic Systems
  • Engineering
  • Human Factors Engineering
  • Human Resources
  • Military Research
  • Notation
  • Probability
  • Probability Density Functions
  • Probability Distributions
  • Random Variables
  • Sampling
  • Security
  • United States
  • Universities

Fields of Study

  • Economics

Readers

  • Adaptive Control and Estimation with Uncertainty in Dynamic Systems.
  • Systems Analysis and Design