Notes on the Value of Information about the Arrival Date of a New Technology (Revised Version)

We consider an investment problem in which one has to decide on which technology to install to satisfy a growing demand, given that at some date in the future some new technology will become available. More specifically, we assume that there are two existing technologies -- the first one with a high capital cost and a low production cost, and the second one with a low capital cost and a high production cost. Presumably the first one would be chosen if the time horizon is long and the second one if it is short. Because of uncertainty on the arrival date of the third technology this time horizon is unknown. The objective of these notes 18 to provide some insights about the expected value of information on the arrival date of the new technology under simple analytical assumptions

The Solution of a Two-Person Poker Variant

This note presents the solution of a two-person poker variant considered by Friedman. The solution is derived using a general algorithm proposed by the author to solve two-person zero sum games with "almost" perfect information

E-Bayesian Solutions of Zero-Sum Games in Extensive Form

The paper introduces a procedure to select an "epsilon-Bayesian" optimal reply after a non-optimal move in zero-sum games defined in extensive form. The procedure was suggested by John Harsanyi. The "epsilon-Bayesian solution" for the class of zero-sum sequential games with incomplete information is derived

Hydrogen Market Penetration: Further Refinements on the Strategy for Research

At its early stage a research and development program is a risky venture. Numerous alternative approaches have to be tested in order to determine a successful one if any. Clearly enthusiasm and even stubbornness will playa significant role, but economic considerations may also help to efficiently allocate the effort and in particular to specify a somewhat "reasonable" time-cost trade-off for the completion of the project. "Reasonable" can only be properly defined once the main features of the situation have been quantified and related to each other within a model. Then logical analysis of the model may be used to provide guidelines for action. The objective of this paper is to briefly review the analysis of a sampling process which appears to be used as a model in the research and development literature

A Note on Information Value Theory for Experiments Defined in Extensive Form

An experiment is defined as a random variable which may take some posterior probability distributions according to a marginal probability. Elementary properties of this definition with respect to information value theory are derived as well as their practical implications

The Value of Information in Strictly Competitive Situations

In this paper a game theoretic model is used to extend information value theory, as developed in decision analysis, to competitive situations. One of the main differences between competitive and noncompetitive situations is that part of the environment (namely the competitors) may be modified as a result of experimentation in another part of the environment (nature). Hence, states of the world and actions may no more be independent. Nevertheless, we shall show how the classical concept may be generalized to cover strictly competitive situations

A Note on Information Value Theory for Experiments Defined in Extensive Form

An experiment is defined as a random variable which may take some posterior probability distributions according to a marginal probability. Elementary properties of this definition with respect to information value theory are derived as well as their practical implications

The Tragedy of Strategy

This working paper is introduced as a draft for one teaching tool in a series to be developed by IIASA. The skits it comprises were first worked out and given by Ponssard and Thompson in the spring of 1974. In spite of popular demand, Glass and Thompson gave a rerun of the performance in the spring of 1975. The version given by Glass and Thompson is here transcribed