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Abstract The so-called umbrella problem (or cost-loss ratio situation), in which an individual must decide whether to take an umbrella in the face of uncertainty concerning whether it will rain today, is sometimes used as a textbook example of decision making under uncertainty. This problem is extended to provide a simple demonstration of the way in which the economic value of imperfect information changes as its quality increases.
Katz et al. (Sat,) studied this question.