The Cost of Information in Dependence on the Investor Relation to the Risk

Hašková Simona ()
Additional contact information
Hašková Simona: Ing. University of Economics in Prague Faculty of Management Department of Business Management Jarošovská 1117, 377 01 Jindřichův Hradec, Czech Republic

Folia Oeconomica Stetinensia, 2012, vol. 11, issue 1, 73-85

Abstract: The contribution sets simple mathematic models describing and explaining the way of behavior of various types of investors (the private and institutionalized ones). The models come from the cardinal utility theory which is used for explaining the connection between the subjective relationship towards risk and some pathologic phenomenon of finance theory (for example the moral hazard question of institutionalized investors) and takes into account the decision making of both ordinary people and professional investors. A reliable estimate of the economic surroundings where the investment should run contributes significantly to a quality of the particular investment decisions. The article contributes to a quality of the investment decision by the original and primary approach to pricing information that lowers the uncertainty in occurrences of the relevant scenarios of the project’s development. At the conclusion there is shown how the shift of the decision breaking point shapes the amount of the acceptable price of the information.

Keywords: Expected net present value; uncertainty and risk; Shannon entropy; pricing of information (search for similar items in EconPapers)
Date: 2012
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/v10031-012-0015-8 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:foeste:v:11:y:2012:i:1:p:73-85:n:7

DOI: 10.2478/v10031-012-0015-8

Access Statistics for this article

Folia Oeconomica Stetinensia is currently edited by Waldemar Tarczyński

More articles in Folia Oeconomica Stetinensia from Sciendo
Bibliographic data for series maintained by Peter Golla ().