We get perfect informahon about the observed variable

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: c informaHon? Assume: •  Time = money •  Cost of taking highway to work (w/o traffic_jam) = 15 •  Cost of taking highway to work (w/traffic_jam) = 30 •  Cost of taking local roads to work = 20 •  P(traffic_jam) = 0.15 •  Two steps: •  Determine opHmal decision w/o informaHon •  EsHmate value of informaHon VPI for Traffic Info •  Cost of local roads = 20 •  Cost of highway = 0.15*30 + 0.85 * 15 = 17.25 •  •  •  •  Traffic = true case: Take local roads; cost = 20 Traffic = false case: Take highway; cost = 15 Expected cost: 0.15 * 20 + 0.85 * 15 = 15.75 Value = 2 •  Important: In this case, the opHmal choice given the informaHon was trivial. In general, we may to do more computaHon to determine the opHmal choice...
View Full Document

Ask a homework question - tutors are online