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Expected value of sample information (evsi) is always less than or equal to expected value of perfect information (evpi).

a. true
b. false

User Amit Levy
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1 Answer

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Final answer:

The statement that EVSI is always less than or equal to EVPI is true, as EVPI represents the maximum value of having perfect information, while EVSI only offers some reduction in uncertainty.

Step-by-step explanation:

The statement that the expected value of sample information (EVSI) is always less than or equal to expected value of perfect information (EVPI) is true. The EVPI represents the maximum amount a decision-maker should be willing to pay for having perfect information before making a decision. Since perfect information would completely eliminate uncertainty, it has the highest possible value. On the other hand, EVSI reflects the value of obtaining additional but not perfect information (a sample) which can reduce uncertainty to some extent, but not completely. Therefore, EVSI is inherently less valuable than EVPI, because it cannot fully eliminate the uncertainty associated with the decision-making process.

User Victoria Seniuk
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