Value of Information
Definition
The value of information indicates whether additional information sufficiently improves a decision.
The expected benefit of additional information before a decision compared to its acquisition and delay costs.
Simply explained
Before paying for another test, you ask: Does the result help the decision more than the test costs or delays it?
Why it matters in practice
The term helps to select, develop, evaluate AI systems in a well-founded manner and realistically assess their technical risks.
Example from business
A company evaluates whether an additional material test sufficiently improves an investment decision.
Limits and pitfalls
- VoI depends on alternatives, probabilities, and the utility model; more data does not automatically have positive value.
Origin & history
Decision theory formalized Expected Value of Perfect and Sample Information in the 20th century.
Use in mid-sized companies
- Possible application: A company evaluates whether an additional material test sufficiently improves an investment decision.
Frequently asked questions
What does value of information mean?
The expected benefit of additional information before a decision compared to its acquisition and delay costs. What should be considered? VoI depends on alternatives, probabilities, and the utility model; more data does not automatically have positive value.
Sources
- Applied Statistical Decision Theory · Raiffa and Schlaifer, Applied Statistical Decision Theory
Source checked on 10.10.2026. Editorial application examples are hypothetical; no evidence of real customer results.
Editorially reviewed on: