Related papers: Theory of Information Pricing
Information value, a measure for decision sensitivity, can provide essential information in engineering and environmental assessments. It quantifies the potential for improved decision-making when reducing uncertainty in specific inputs. By…
When additional information sources are available, an important question for an agent solving a certain problem is how to optimally use the information the sources are capable of providing. A framework that relates information accuracy on…
We investigate asymmetry of information in the context of robust approach to pricing and hedging of financial derivatives. We consider two agents, one who only observes the stock prices and another with some additional information, and…
Consider a network design application where we wish to lay down a minimum-cost spanning tree in a given graph; however, we only have stochastic information about the edge costs. To learn the precise cost of any edge, we have to conduct a…
A data intermediary acquires signals from individual consumers regarding their preferences. The intermediary resells the information in a product market wherein firms and consumers tailor their choices to the demand data. The social…
Considering that both the entropy-based market information and the Hurst exponent are useful tools for determining whether the efficient market hypothesis holds for a given asset, we study the link between the two approaches. We thus…
In the course of any statistical analysis, it is necessary to consider issues of data quality and model appropriateness. Value of information methods were initially put forward in the middle of the twentieth century in order to provide a…
In this paper we have devised an alternative methodological approach for quantifying utility in terms of expected information content of the decision-maker's choice set. We have proposed an extension to the concept of utility by…
In previous work, we presented a novel information-theoretic privacy criterion for query forgery in the domain of information retrieval. Our criterion measured privacy risk as a divergence between the user's and the population's query…
We study the optimal usage-based pricing problem in a resource-constrained network with one profit-maximizing service provider and multiple groups of surplus-maximizing users. With the assumption that the service provider knows the utility…
The present paper shows that it can be advantageous for traders to publish their information on the true value of an asset even if they (i) cannot build a position in the asset prior to the publication of their information and (ii) cannot…
We characterize information as risk reduction between knowledge states represented by partitions of the underlying probability space. Entropy corresponds to risk reduction from no (or partial) knowledge to full knowledge about a random…
We show that under mild assumptions, the total value of information to informed traders in the market can be measured by the covariance between price changes and order flow. This covariance captures noise trader losses, which equal informed…
The efficient use of available resources is a key factor in achieving success on both personal and organizational levels. One of the crucial resources in knowledge economy is time. The ability to force others to adapt to our schedule even…
In economics, there are many ways to describe the interaction between a "seller" and a "buyer". The most common one, with which we interact almost every day, is selling for a fixed price. This option is perfect for selling a mass product,…
We present information value, a measure which quantifies the predictability of an utterance relative to a set of plausible alternatives. We introduce a method to obtain interpretable estimates of information value using neural text…
The influence of additional information on the decision making of agents, who are interacting members of a society, is analyzed within the mathematical framework based on the use of quantum probabilities. The introduction of social…
A decision maker is choosing between an active action (e.g., purchase a house, invest certain stock) and a passive action. The payoff of the active action depends on the buyer's private type and also an unknown state of nature. An…
Standard information theory says nothing about how much meaning is conveyed by a message. We fill this gap with a rigorously justifiable, quantitative definition of ``pragmatic information'', the amount of meaning in a message relevant to a…
We consider decision-making under incomplete information about an unknown state of nature. We show that a decision problem yields a higher value of information than another, uniformly across information structures, if and only if it is…