Calculating the Value of Information ​

Course Overview:

Navigating business decisions in an uncertain world requires knowing when and how much to invest in gathering information. This course provides you with the essential tools to quantify the economic worth of data, ensuring you invest wisely and avoid costly analysis paralysis.
 
You will learn foundational concepts like expected value (EV) analysis, a powerful method for distilling complex outcomes into a single comparable number. Explore how Bayesian logic allows you to update your probabilities based on new information, moving from prior beliefs to more informed posterior probabilities. Master the use of decision-making tools such as decision trees and influence diagrams to structure problems, visualize potential scenarios, and calculate the expected value of different strategic paths.
 
Beyond the theoretical, this course delves into calculating the value of both perfect and imperfect information, helping you determine the maximum you should pay for data sources like market tests or expert opinions. Understand the difference between the value of information (reducing uncertainty) and the value of control (increasing probabilities of favorable outcomes). By the end, you will be equipped to identify which uncertainties are most valuable to reduce and make more profitable, data-driven decisions.
 
Learn to make informed choices by understanding what information is truly worth.

• Recognize forms of Bayes’ theorem and how it helps determine the value of information
• Recall how to calculate the value of information
• Identify practical applications of the value of information