Consider the Swanson case example in Section 11.3 of textbook. The decision tree can be found as

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Consider the Swanson case example in Section 11.3 of textbook. The decision tree can be found as Figure 11.3 on page 201. In textbook, value of information of the market size is calculated. There is another important uncertainty - market share.

Calculate the value of perfect information of the market share.
Suppose the company can test to assess the market share. This test would be 70% accurate in detecting a high (0.25) market share, 90% accurate in detecting a base (0.20) market share, and 85% in detecting a low (0.15) market share. Calculate the value of imperfect information of this test.

Posted Date: May 18, 2024 02:06 PM

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Consider the Swanson case example in Section 11.3 of textbook. The decision tree can be found as

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