INFORMATION EVALUATION AND DECISION MAKERS' OBJECTIVES.

Abstract

The article deals with the relation between business policy and the evaluation of information used to make decisions in accordance with the policy. Theoretically, the value of information is defined as the difference between the value of the business outcome with and without having the information. Information Economics (IE) suggests an avenue of approach to the problem via concepts of Decision Theory. This statement is based on another conception; that individual's desire to maximize expected utility. For each survey prediction the expected outcome of a decision is obtained by replacing the former event probabilities by the modified ones. The results will, of course, be different for different predictions and signals. Very seldom is business policy expressed in terms of a single performance measure. Most often it comprises several attributes, some of which are not even measured on interchangeable scales. The selection of appropriate information systems and decision rules is based on prevailing business policy, which may incorporate personal and organizational preferences.