Question: Explain in general why EVSI is the same regardless of
Explain in general why EVSI is the same, regardless of the actual cost of the information. For example, in the Acme problem EVSI is the same regardless of whether the actual cost of the test market is $100,000, $200,000, or any other value. Then explain how EVSI, together with the actual cost of the information, leads to the decision about whether to purchase the information.
Relevant QuestionsFollowing up on the previous problem, the expected net gain from information is defined as the expected amount gained by having access to the information, at its given cost, as opposed to not having access to the ...The concept behind EVPI is that you purchase perfect information (the envelope), then open the envelope to see which outcome occurs, and then make an easy decision. You do not, however, get to choose what information the ...A local energy provider offers a landowner $180,000 for the exploration rights to natural gas on a certain site and the option for future development. This option, if exercised, is worth an additional $1,800,000 to the ...Consider a population of 2000 individuals, 800 of whom are women. Assume that 300 of the women in this population earn at least $60,000 per year, and 200 of the men earn at least $60,000 per year. a. What is the probability ...A product manager at Clean & Brite (C&B) wants to determine whether her company should market a new brand of toothpaste. If this new product succeeds in the marketplace, C&B estimates that it could earn $1,800,000 in future ...
Post your question