A decision maker's worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. What is the expected value of perfect information?
A)$5,000
B)$4,000
C)$3,000
D)$2,000
E)$1,000

Question

Quizplus · Accepted Answer

The expected value of perfect information is the difference between the expected value with perfect information ($5,000) and the best expected value without it ($3,000), which is $2,000.

A Decision Maker's Worst Option Has an Expected Value of $1,000