The Value of Information

How much is a forecast worth?

An interactive lesson with 6 steps, about 5 minutes: you predict, drag and solve, with instant feedback on every answer. It runs in your browser and needs JavaScript.

What you’ll learn

• Decisions flip at a threshold set by the ratio of costs.
• The value of information is the improvement in expected outcome it allows.
• Information is worth most when you’re near the threshold, and nothing if it can’t change your choice.

Steps

1. To carry or not to carry
2. A different threshold
3. When is a forecast worth most?
4. Information that changes nothing
5. Worth of a perfect forecast
6. Should we survey first?