The value of information and the value of awareness

John Quiggin

Theory and Decision, 2016, vol. 80, issue 2, 167-185

Abstract: Recent literature has examined the problem facing decision makers with bounded awareness, who may be unaware of some states of nature. A question that naturally arises here is whether a value of awareness (VOA), analogous to value of information (VOI), can be attributed to changes in awareness. In this paper, such a value is defined. It is shown that the sum VOA $$+$$ + VOI is constant and, except for scale effects, independent of the choice set. It follows that the larger is VOA, the smaller is VOI. This point is illustrated for a simple two-state case, then proved for general classes of compact convex choice sets, and for alternative interpretations of the concept of unawareness. Copyright Springer Science+Business Media New York 2016

Keywords: Value of information; Awareness (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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Working Paper: The value of information and the value of awareness (2013)
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DOI: 10.1007/s11238-015-9496-x

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