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