6 Mar

In today’s blog I am going to discuss how the value of information comes from the concept of decision making analysis.
It can be defined as how much answering a question allows a decision maker to improve its decision. The value of information can be seen throughout many aspects of everyday life such as:
-Choosing whether to invest money
-Choosing a career

In this blog im going to pay particular attention to the topic of choosing whether to invest money or not.


From a decision analysis perspective, acquiring extra information is only useful if it has a significant probability of changing the decision-maker’s currently preferred strategy. The penalty of acquiring more information is usually valued as the cost of that extra information, and sometimes also the delay incurred in waiting for the information. Therefore information is only necessary when it is relevant and worthwhile. If for example u planned on investing in a new company when the stocks were at a low price, but decided to do some background research and asses the market. However by the time you have your research completed the stocks have gone up in price and you missed your chance to buy them at the lowest possible cost. That is a clear example of when the value of information was not necessary as it took far to long for you to gather the information.

If perfect knowledge would not change a decision, the extra information is worthless, and if it does change a decision then the value is the difference between the expected net benefit of the new selected option compared to that previously favored. So therefore the decision maker has to think quickly and decide is it worthwhile to take on this investment. Its a gamble at the end of the day but a gamble that can be worthwile with the correct information at the decision makers disposal. How he acquires that information is down to the individual.


Information can come from many different sources with most people willing to offer advice and expertise, but its important the the final decision comes from yourself and not influenced by a third party. As long as you have valued the information you have previously received.


  1. sad112540853 March 8, 2013 at 1:02 am #

    Great blog 😀

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