The Expected Value of Perfect Information
The value at the root node is the expected value of the decision tree and is based on current information. The current information is known to be imperfect—the mere fact that there are any chance nodes at all means there is less-than-perfect information about the situation. Given an analyzed decision tree, a reasonable follow-on question is, “Would there be any value in taking actions that would reduce the probability of ending up in an undesirable future state?” If you spent more time or money on research, experimentation, prototyping, or things like that, you might be able to refine the probabilities on one or more of the chance nodes. You might even be able to eliminate one or more paths through the ...
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