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On the value of information Info-Metrics Workshop American Univ. Fall, 2009 1 On the value of information in games
 

Summary: On the value of information Info-Metrics Workshop American Univ. Fall, 2009 1
On the value of information in games:
or, some things you might rather not know
from Osborne's Game Theory, p. 283
On the value of information Info-Metrics Workshop American Univ. Fall, 2009 2
A Basic Theorem of (Bayesian) Expected Utility Theory:
If you can postpone a terminal decision in order to
observe, cost free, an experiment whose outcome
might change your terminal decision, then it is
strictly better to postpone the terminal decision in
order to acquire the new evidence.
The analysis also provides a value for the new evidence, to answer:
How much are you willing to "pay" for the new information?
On the value of information Info-Metrics Workshop American Univ. Fall, 2009 3
An agent faces a current decision:
with k terminal options D = {d1, ..., d*, ..., dk} (d* is the best of these)
and one sequential option: first conduct experiment X, with outcomes
{x1, ..., xm} that are observed, then choose from D.
On the value of information Info-Metrics Workshop American Univ. Fall, 2009 4
Terminal decisions (acts) as functions from states to outcomes

  

Source: Andrews, Peter B. - Department of Mathematical Sciences, Carnegie Mellon University

 

Collections: Mathematics