Extending the vNM EU

“Patrons of a local restaurant often do not wish to enter the kitchen.”

Or, put another way –

“There are many situations in which individuals have a choice of whether or not to observe the eventual outcome. In these instances, individuals often prefer to avoid observing the outcome.”

These observations form the bedrock for investigations into ‘The Value of Useless Information‘ – the title of a yet-to-be published article from Larbi Alaoui, a job candidate from the Economics Department at the University of Pennsylvania.
The paper stretches to around 50 pages, with a comprehensive set of complex calculations which illustrate the problems associated with using the standard von Neumann-Morgenstern Expected Utility theory (vNM EU) in many scenarios.
The new paradigm extends the vNM EU to include the VUI model (Value of Useless Information). It’s suggested that the insights into the value of Useless Info (and doubt-proneness) might further understanding of behaviour in lotteries and gambling situations as well as in the sphere of Political Economy, where “…agents have a greater disutility from acquiring information if they are more ignorant ex-ante.”

More info and a link-trail at Really Magazine.

Improbable Research