What is the expected value of perfect information?
The expected value of perfect information is the tool used to attach the value of information that changes the process of deciding through the revelation of the factors that change in the final decision. TTH is to say that the expected value of perfect information is used to find a value for previously unknown information that is added to already known data that provides information recipient with an advantage or advantage that would not be possible without other details. The expected value of perfect information is therefore observed with the type of adjustment already provided by known information. This adjustment serves as the basis for accepting with the amount for the value of the information provided to the recipient.
Example of the application of the expected value of perfect information can be seen in asitation where the company in the United States trying to open a branch in Hong Kong hires an international business consultantto provide it on logistics information, working laws in the country, the best places for the location of a subsidiary and important local business contacts. In this case, the company may already have some information about the proposed move to Hong Kong, but may not have all the information it needs. The expected value of perfect information would therefore determine by deducting information that the company already has from any other details that the consulting company brings to the table because of the fact that such information will benefit the company.
6 Any information from someone hired investor for the purpose of determination of merit or lack of merit associated with investing in various industries will be subjected to analysis to find the value of the new data listed in the report. Therefore, a prospective investor determines the value of the information in terms of the expected benefits it receives from new information. The expected value of perfect information is actually based on the SkutThe fact that it makes the decision -making process a more confident matter by allowing a person to make a decision to have a more balanced or well rounded view of the situation.