The value of information and the value of awareness

Recent literature has examined the problem facing decisionmakers with bounded awareness, who may be unaware of some states of nature. A question that naturally arises here is whether a value of awareness (VOA), analogous to VOI, can be attributed to changes in awareness. In this note it is shown, in a sense that will be made precise, that the sum VOA+VOI is constant and independent of the choice set. It follows that, the greater is VOA, the less is VOI. This point is illustrated for a simple two-state case, then proved for general classes of choice sets. The analysis is then extended to cover alternative concepts of choice under unawareness.

Issue Date:
Jan 16 2013
Publication Type:
Working or Discussion Paper
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Series Statement:
Risk and Uncertainty Program

 Record created 2017-04-01, last modified 2018-01-22

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