Accession Number:

AD0786756

Title:

The Economics of Decision Making

Descriptive Note:

Technical rept. 1 May 1973-31 Aug 1974

Corporate Author:

STANFORD UNIV CA DEPT OF ENGINEERING ECONOMIC SYSTEMS

Personal Author(s):

Report Date:

1974-08-31

Pagination or Media Count:

22.0

Abstract:

This paper addresses the class of decision problems where the value function is approximately quadratic in both decision and state variables. The main result is that the value of an experiment depends only on the prior variance of the posterior mean. This is a tremendous simplification over the general case where the value of information depends on the prior probability distribution of the posterior probability distribution.

Subject Categories:

  • Administration and Management
  • Operations Research

Distribution Statement:

APPROVED FOR PUBLIC RELEASE