Needed data expenditure for an ambiguous decision problem

Bruce D. Spencer, Lincoln E. Moses

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


The amount worth spending to collect and analyze data depends on the uses of the data. We consider the determination of the optimal expenditure in some simple situations when only some aspects of the data use are known. In particular, we consider uses where an action is taken if a statistic exceeds a threshold τ, which is unknown at the time of data planning and collection (though its value will not depend on the value of the statistic). We analyze the sensitivity of the optimal expenditure to the a priori uncertainty in τ. For many decision problems, the optimal expenditure decreases with increasing uncertainty about τ, but we identify some uses for which the optimal expenditure increases with increasing uncertainty about τ. We also study the effects of other forms of ambiguity. Uncertainty about whether the data will be used typically decreases the optimal expenditure, as does uncertainty about the preferences represented in the decision making.

Original languageEnglish (US)
Pages (from-to)1099-1104
Number of pages6
JournalJournal of the American Statistical Association
Issue number412
StatePublished - Dec 1990


  • Bayesian decision theory
  • Benefit–cost analysis
  • Cost–benefit analysis
  • Decision theory
  • Morgenstern’s hypothesis
  • Statistical agencies

ASJC Scopus subject areas

  • Statistics and Probability
  • Statistics, Probability and Uncertainty


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