Analysis of the value of information

Abstract

Information, which means the interpretation of different data by people, represents different values for different users. The determination of the value of information is subjective for two reasons. It is difficult to determine the volume of profit gained by having the information, while the value of information is also influenced by its authenticity. This article describes a method for objective decision-making, using the theory of probability to determine the value of information. The value of information is determined by the analysis of the expected value of the income. Changes in the expected value of the income are presented in the form of four cases, in which the degree of available information is varied. Information can be absolutely reliable, unreliable, absolutely incorrect or missing. The value of information is then determined by the increase in the expected value of the income.