The maximum amount that a decision maker would pay for perfect information is
A)the expected value of the best decision
B)the expected value given perfect information
C)the expected value of perfect information
D)the sum of the expected values for all decision alternative

Question

Quizplus · Accepted Answer

The maximum amount a decision maker would pay for perfect information is the expected value of perfect information. This is the maximum amount because it represents the value of having all possible information available to make the best decision possible. The expected value of perfect information takes into account all possible outcomes and their respective probabilities in order to determine the value of having perfect information.

The Maximum Amount That a Decision Maker Would Pay for Perfect