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Advances in Info-MetricsInformation and Information Processing across Disciplines$
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Min Chen, J. Michael Dunn, Amos Golan, and Aman Ullah

Print publication date: 2020

Print ISBN-13: 9780190636685

Published to Oxford Scholarship Online: December 2020

DOI: 10.1093/oso/9780190636685.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 19 June 2021

Information and Its Value

Information and Its Value

(p.3) 1 Information and Its Value
Advances in Info-Metrics

J. Michael Dunn

Amos Golan

Oxford University Press

In this chapter, we are interested in understanding the nature of information and its value. We focus on information that is used for making decisions, including related activities such as constructing models, performing inferences, and making predictions. Our discussion is mostly qualitative, and it touches on certain aspects of information as related to the sender, receiver, and a possible observer. Although our emphasis is on shedding more light on the concept of information for making decisions, we are not concerned here with the exact details of the decision process, or information processing itself. In addition to discussing information, our expedition takes us through the traditional notions of utility, prices, and risk, all of which, under certain conditions, relate to the value of information. Our main conclusion is that the value of information (used in decision making) is relative and subjective. Since information is relative, it can have more than one value, say a value for the sender, a value for the receiver, or even different values for different senders and receivers, and various values for various “eavesdroppers.” Of course, the value might be zero for any of these. Importantly, that value is inversely related to risk when the information is used for decision making. Although this conclusion is likely expected, we did argue for it in a way that relies on some fundamentals about both value and information.

Keywords:   decision making, entropy, information, risk, utility, value

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