The expected value of perfect information (EVPI) is the:
A) payoff for a decision made under perfect information.
B) payoff under minimum risk.
C) average expected payoff.
D) difference between the payoff under perfect information and the payoff under risk.
E) greater of EVwPI and Maximum EMV.

Question

Quizplus · Accepted Answer

The expected value of perfect information (EVPI) is the difference between the payoff under perfect information and the payoff under risk. Therefore, option D is the correct answer. Option A refers to the payoff under perfect information itself, not the EVPI. Option B refers to minimum risk, but it is not related to the EVPI. Option C refers to the average expected payoff, but it does not explicitly consider perfect information. Option E refers to EVwPI and Maximum EMV, which are different concepts that are not equivalent to EVPI.

The Expected Value of Perfect Information (EVPI) Is The