Value of information

Value of information (VOI or VoI) is the amount a decision maker would be willing to pay for information prior to making a decision. Value of information (VOI or VoI) is the amount a decision maker would be willing to pay for information prior to making a decision. VoI is sometimes distinguished into value of perfect information, also called value of clairvoyance (VoC), and value of imperfect information. They are closely related to the widely known expected value of perfect information and expected value of sample information. Note that VoI is not necessarily equal to 'value of decision situation with perfect information' - 'value of current decision situation' as commonly understood. A simple example best illustrates the concept. Consider the decision situation with one decision, for example deciding on a 'Vacation Activity'; and one uncertainty, for example what will the 'Weather Condition' be? But we will only know the 'Weather Condition' after we have decided and begun the 'Vacation Activity'.