The value of information and the value of awareness

John Quiggin

No 151207, Risk and Sustainable Management Group Working Papers from University of Queensland, School of Economics

Abstract: Recent literature has examined the problem facing decisionmakers 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 VOI, can be attributed to changes in awareness. In this note it is shown, in a sense that will be made precise, that the sum VOA+VOI is constant and independent of the choice set. It follows that, the greater is VOA, the less is VOI. This point is illustrated for a simple two-state case, then proved for general classes of choice sets. The analysis is then extended to cover alternative concepts of choice under unawareness.

Keywords: Industrial; Organization (search for similar items in EconPapers)
Pages: 9
Date: 2013-01-16
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Journal Article: The value of information and the value of awareness (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uqsers:151207

DOI: 10.22004/ag.econ.151207

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