Expected value of perfect information (EVPI) will be greater than expected opportunity loss associated with the EMV maximizing decision.

Question

Quizplus · Accepted Answer

Expected Value of Perfect Information (EVPI) is equal to the Expected Opportunity Loss (EOL) associated with the EMV maximizing decision, not greater. EVPI represents the maximum amount a decision-maker should be willing to pay for perfect information, which effectively eliminates the uncertainty and the associated opportunity loss.

Expected Value of Perfect Information (EVPI) Will Be Greater Than