The Value of Information Given Decision Flexibility

Abstract

This paper presents a useful concept for decision analysis -- the value of information having flexibility. An exploration is made into the impact of decision flexibility on the value of information. The usefulness of calculating the value of information under various assumptions concerning decision flexibility is illustrated with a simple economic example. An upper limit to the value of information given flexibility is the expected value of perfect information given perfect flexibility (EVPIGPF). By approximating an arbitrary smooth value function with a quadratic equation, first order characteristics of the EVPIGPF are identified. Finally, it is shown that the technique of proximal decision analysis may be expanded to provide a simplified estimation of the EVPIGPF for large-scale decision problems.

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Document Details

Document Type
Technical Report
Publication Date
Jun 30, 1975
Accession Number
ADA016836

Entities

People

  • Miley Wesson Merkhofer

Organizations

  • Stanford University

Tags

Communities of Interest

  • Human Systems

DTIC Thesaurus Topics

  • Compensation
  • Economic Systems
  • Engineering
  • Equations
  • Human Factors Engineering
  • Human Resources
  • Probability
  • Probability Density Functions
  • Probability Distributions
  • Production
  • Quadratic Equations
  • Random Variables
  • Resilience
  • Security
  • Sensitivity
  • Systems Science
  • Universities

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