Abstract
Wakker (1988) has recently shown that, in contrast to an expected utility maximizer, the value of information will sometimes be negative for an agent who violates the independence axiom of expected utility theory. We demonstrate, however, that the value of perfect information will always be nonnegative if the agent satisfies a weak dominance axiom. This result thus mitigates to some degree the normative objection to nonlinear utility theory implicit in Wakker's finding.
Original language | English (US) |
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Pages (from-to) | 127-131 |
Number of pages | 5 |
Journal | Theory and Decision |
Volume | 30 |
Issue number | 2 |
DOIs | |
State | Published - Mar 1 1991 |
Keywords
- Value of perfect information
- nonlinear utility
ASJC Scopus subject areas
- General Decision Sciences
- Developmental and Educational Psychology
- Arts and Humanities (miscellaneous)
- Applied Psychology
- General Social Sciences
- Economics, Econometrics and Finance(all)
- Computer Science Applications