The _______________________ is the difference between the expected payoff that would be realized if the best alternative action were selected if we knew which state of nature would occur and the expected payoff under risk.
A)Maximax criterion
B)Maximin criterion
C)Expected utility
D)Expected value of perfect information
E)Expected value of sample information

Question

Quizplus · Accepted Answer

The expected value of perfect information is the difference between the expected payoff under certainty (i.e., if we knew which state of nature would occur) and the expected payoff under risk. This measures the value of obtaining perfect information about which state of nature will occur.

The _______________________ Is the Difference Between the Expected Payoff That