Abstract
Wakker (1988) has recently shown that, in contrast to an expected utility maximizer, the value of information will sometimes be negative for an agent who violates the independence axiom of expected utility theory. We demonstrate, however, that the value ofperfect information will always be nonnegative if the agent satisfies a weak dominance axiom. This result thus mitigates to some degree the normative objection to nonlinear utility theory implicit in Wakker's finding.
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Schlee, E.E. The value of perfect information in nonlinear utility theory. Theor Decis 30, 127–131 (1991). https://doi.org/10.1007/BF00134120
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DOI: https://doi.org/10.1007/BF00134120