ABSTRACT
The decision theoretic perspective includes elements of Bayesian inference, subjective expected utility, signal detection
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theory, and the distributed signal detection theoretic (DSDT) model. This perspective directly leads to an interesting distinction between the roles of imperfect and perfect warnings and highlights the value of information. As expanded on later in this chapter, a rational1 decision maker will always follow a perfect warning, but he or she will follow the recommendation of an imperfect warning only if the expected value (or utility) of ignoring the warning exceeds the expected value (or utility) of following it. It is interesting to note that the optimal choice also depends on information the decision maker has obtained from other sources. The value of the information provided can be directly measured in terms of how much effect the information should have, assuming a rational decision maker. Simply put, information is valuable only if it potentially will cause the decision maker to make a different choice than he and she would have made without it. A rational decision maker will use information only if its expected value exceeds the cost of acquiring it. This implies that people need to perceive some benefit from attending to a warning before they will do so.
