18 lines
749 B
Markdown
18 lines
749 B
Markdown
# Expected Value of Perfect Information
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In [[decision-theory]], the 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]].
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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. |