Experiments and analysis of information use and value in a decision‐making context

This article describes a series of experiments which relate information to decision making. The experiments were developed with the objectives of validating a previously suggested conceptual model of information flow and its relation to decision making, as well as to establish specific values for the significant parameters involved. The conceptual approach related information to its effectiveness and therefore its use and value. Theory, measures, and relationships thus derived relate to the way information, once it is transmitted and received, is utilized by a decision maker. Specifically, information is said to be data of value in decision making. Starting with this definition it has been possible to define information quantitatively and to establish some of its properties and interrelationships. In the experiments described here a subject uses a computer terminal interactively in order to maximize subjective expected value over a number of courses of action available to him by choosing what be believes to be an optimal course of action at each trial. A decision‐making situation is formulated in terms of value and probability matrices, unknown to the subject. The subject is instructed to maximize the sum of the outcome values obtained, and through feedback to learn the structure and the probabilities involved. Data were obtained from 60 subjects each experimenting on 12 different matrices. These data generally validated the theoretical approach and also enabled the determination of specific values for significant parameters involved. The experimental design is described in detail in the article. Analysis of some of the data is presented.