What does it mean to have perfect information when making a decision?

Having perfect information when making a decision means possessing all relevant and accurate information necessary to make an informed choice. This includes understanding all the options available, the potential outcomes of each choice, and the probabilities associated with these outcomes. When a decision-maker has perfect information, they can evaluate the situation comprehensively, leading to more rational and effective decision-making.

In contrast, solely relying on intuition, believing in spontaneity, or understanding only part of the available information can lead to incomplete assessments and potentially flawed decisions. Making decisions based on intuition lacks the grounding in data that perfect information provides, while spontaneity disregards the structured evaluation of facts. Having limited information means the decision-maker may overlook critical factors, leading to suboptimal outcomes. Thus, the essence of perfect information is rooted in the idea of thorough knowledge that guides effective and informed choices.