Computation
VoC is derived strictly following its definition as the monetary amount that is big enough to just offset additional benefit of getting more information. In other words; VoC is calculated iteratively until;
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- "value of decision situation with perfect information while paying VoC" = "value of current decision situation".
A special case is when the decision-maker is risk neutral where VoC can be simply computed as;
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- VoC = "value of decision situation with perfect information" - "value of current decision situation"
This special case is how expected value of perfect information and expected value of sample information are calculated where risk neutrality is implicitly assumed. For cases where decision-maker is risk averse or risk seeking, this simple calculation does not necessary yield correct result, and iterative calculation is the only way to ensure correctness.
Decision tree and influence diagram are most commonly used in representing and solving decision situation as well as associated VoC calculation. Influence diagram, in particular, is structured to accommodate team decision situation where incomplete sharing of information among team members can be represented and solved very efficiently. While decision tree is not designed to accommodate team decision situation, it can do so by augmenting it with information set widely used in game tree.
Read more about this topic: Value Of Information
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