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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.