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The value of information and the value of awareness


  • John Quiggin



Recent literature has examined the problem facing decision makers 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 value of information (VOI), can be attributed to changes in awareness. In this paper, such a value is defined. It is shown that the sum VOA $$+$$ + VOI is constant and, except for scale effects, independent of the choice set. It follows that the larger is VOA, the smaller is VOI. This point is illustrated for a simple two-state case, then proved for general classes of compact convex choice sets, and for alternative interpretations of the concept of unawareness. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • John Quiggin, 2016. "The value of information and the value of awareness," Theory and Decision, Springer, vol. 80(2), pages 167-185, February.
  • Handle: RePEc:kap:theord:v:80:y:2016:i:2:p:167-185
    DOI: 10.1007/s11238-015-9496-x

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    References listed on IDEAS

    1. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2013. "Dynamic unawareness and rationalizable behavior," Games and Economic Behavior, Elsevier, vol. 81(C), pages 50-68.
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    5. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    6. Halpern, Joseph Y. & Rego, Leandro Chaves, 2008. "Interactive unawareness revisited," Games and Economic Behavior, Elsevier, vol. 62(1), pages 232-262, January.
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    9. Chambers,Robert G. & Quiggin,John, 2000. "Uncertainty, Production, Choice, and Agency," Cambridge Books, Cambridge University Press, number 9780521785235, March.
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    13. Machina, Mark J, 1982. ""Expected Utility" Analysis without the Independence Axiom," Econometrica, Econometric Society, vol. 50(2), pages 277-323, March.
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    More about this item


    Value of information; Awareness;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty


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