vault backup: 2025-07-22 16:59:59

perfect-information.md

@@ -0,0 +1,23 @@
+# Perfect Information
+
+In [[strategy]], perfect information is hypothetical information
+that would eliminate some defined [[uncertainty]].
+
+## Expected Value of Perfect Information
+
+Expected value of perfect information (EVPI)
+is the price that one would be willing to pay
+in order to gain access to perfect information.
+
+The perceived *value* of decreased uncertainty
+must be weighed against its *cost*.
+
+This concept provides the basis for the solution of one or more [[open-problems]].
+To reduce [[risk]] in [[construction-estimating]],
+an organization pays in estimator hours.
+These hours have a direct cost in salary and benefits,
+however the greater cost is the opportunity cost
+of tying up an estimator who could otherwise be starting a new project.
+
+In many cases, the utility of doubled throughput
+far outweighs the increased risk of individual bids.