Value of information and value of decisions

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Abstract

This paper introduces an extended formulation of decision analyses, which provides an enhanced basis for the definition of the value of information, the value of actions and the value of actions and information analyses. The formulation of decision analyses is (1) extended by introducing an action implementation uncertainty and - following the reasoning of Raiffa and Schlaifer (1961) - (2) by considering both the information acquirement state and the action implementation state jointly and separately for the definition of the types of decision analyses. Decision value analyses are derived by explicitly distinguishing and addressing the cause of the expected utility gain namely by information, by actions or by both action and information. It is shown how different optimal sets of information and actions and their acquirement or implementations states, respectively, lead to different decision value classifications. Published studies and applied decision and decision value analyses are analyzed showing a diversity beyond the original definitions by Raiffa and Schlaifer (1961), however, also being less diverse in comparison to the introduced classification in this paper.
Original languageEnglish
Title of host publicationICASP13 Proceedings
Number of pages8
Publication date2019
ISBN (Electronic)979-119671250195530
Publication statusPublished - 2019
Event13th International Conference on Applications of Statistics and Probability in Civil Engineering - Seoul, Korea, Democratic People's Republic of
Duration: 26 May 201930 May 2019
Conference number: 13

Conference

Conference13th International Conference on Applications of Statistics and Probability in Civil Engineering
Number13
CountryKorea, Democratic People's Republic of
CitySeoul
Period26/05/201930/05/2019

Cite this

@inproceedings{24642091525048f3a8ec95a08ab3c338,
title = "Value of information and value of decisions",
abstract = "This paper introduces an extended formulation of decision analyses, which provides an enhanced basis for the definition of the value of information, the value of actions and the value of actions and information analyses. The formulation of decision analyses is (1) extended by introducing an action implementation uncertainty and - following the reasoning of Raiffa and Schlaifer (1961) - (2) by considering both the information acquirement state and the action implementation state jointly and separately for the definition of the types of decision analyses. Decision value analyses are derived by explicitly distinguishing and addressing the cause of the expected utility gain namely by information, by actions or by both action and information. It is shown how different optimal sets of information and actions and their acquirement or implementations states, respectively, lead to different decision value classifications. Published studies and applied decision and decision value analyses are analyzed showing a diversity beyond the original definitions by Raiffa and Schlaifer (1961), however, also being less diverse in comparison to the introduced classification in this paper.",
author = "Sebastian Th{\"o}ns and Medha Kapoor",
year = "2019",
language = "English",
booktitle = "ICASP13 Proceedings",

}

Thöns, S & Kapoor, M 2019, Value of information and value of decisions. in ICASP13 Proceedings. 13th International Conference on Applications of Statistics and Probability in Civil Engineering, Seoul, Korea, Democratic People's Republic of, 26/05/2019.

Value of information and value of decisions. / Thöns, Sebastian; Kapoor, Medha.

ICASP13 Proceedings. 2019.

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

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N2 - This paper introduces an extended formulation of decision analyses, which provides an enhanced basis for the definition of the value of information, the value of actions and the value of actions and information analyses. The formulation of decision analyses is (1) extended by introducing an action implementation uncertainty and - following the reasoning of Raiffa and Schlaifer (1961) - (2) by considering both the information acquirement state and the action implementation state jointly and separately for the definition of the types of decision analyses. Decision value analyses are derived by explicitly distinguishing and addressing the cause of the expected utility gain namely by information, by actions or by both action and information. It is shown how different optimal sets of information and actions and their acquirement or implementations states, respectively, lead to different decision value classifications. Published studies and applied decision and decision value analyses are analyzed showing a diversity beyond the original definitions by Raiffa and Schlaifer (1961), however, also being less diverse in comparison to the introduced classification in this paper.

AB - This paper introduces an extended formulation of decision analyses, which provides an enhanced basis for the definition of the value of information, the value of actions and the value of actions and information analyses. The formulation of decision analyses is (1) extended by introducing an action implementation uncertainty and - following the reasoning of Raiffa and Schlaifer (1961) - (2) by considering both the information acquirement state and the action implementation state jointly and separately for the definition of the types of decision analyses. Decision value analyses are derived by explicitly distinguishing and addressing the cause of the expected utility gain namely by information, by actions or by both action and information. It is shown how different optimal sets of information and actions and their acquirement or implementations states, respectively, lead to different decision value classifications. Published studies and applied decision and decision value analyses are analyzed showing a diversity beyond the original definitions by Raiffa and Schlaifer (1961), however, also being less diverse in comparison to the introduced classification in this paper.

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