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Hi ! I don't understand how to calculate the expected value of perfect information for a decision tree. Lets say you have a decision with
Hi I don't understand how to calculate the expected value of perfect information for a decision tree. Lets say you have a decision with two alternatives. I've noticed they draw out a third alternative and calculate the expected value for it and then subtract with the highest expected value of the two alternatives. I don't understand however how they draw out the branch for the EVPI. Can someone explain the steps of how to think, what are the strategies? How do I draw that branch out, I find it very confusing. Please, if you're not sure, don't give me an answer because it's important I understand this. Also preferably draw an example.
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