Discuss the below:
Expected value of perfect information
Q: The local operations manager for the IRS must decide whether to hire 1, 2, or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code.
low medium high of workers compliance compliance compliance
1 50 50 50
2 100 60 20
3 150 70 -10
If he thinks the chances of low, medium, and high compliance are 20%, 30%, and 50%, respectively, what is his expected value of perfect information?