vault backup: 2025-07-08 07:25:20

expected-value-of-perfect-information.md

@@ -4,9 +4,15 @@ In [[decision-theory]], the 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.