Information economics or the economics of information is the branch of microeconomics that studies how information and information systems affect an economy and economic decisions.
One application considers information embodied in certain types of commodities that are "expensive to produce but cheap to reproduce." Examples include computer software (e.g., Microsoft Windows), pharmaceuticals, and technical books. Once information is recorded "on paper, in a computer, or on a compact disc, it can be reproduced and used by a second person essentially for free." Without the basic research, initial production of high-information commodities may be too unprofitable to market, a type of market failure. Government subsidization of basic research has been suggested as a way to mitigate the problem.
The subject of "information economics" is treated under Journal of Economic Literature classification code JEL D8 – Information, Knowledge, and Uncertainty. The present article reflects topics included in that code. There are several subfields of information economics. Information as signal has been described as a kind of negative measure of uncertainty. It includes complete and scientific knowledge as special cases. The first insights in information economics related to the economics of information goods.
In recent decades, there have been influential advances in the study of information asymmetries and their implications for contract theory, including market failure as a possibility.
Information economics is formally related to game theory as two different types of games that may apply, including games with perfect information, complete information, and incomplete information. Experimental and game-theory methods have been developed to model and test theories of information economics, including potential public-policy applications such as mechanism design to elicit information-sharing and otherwise welfare-enhancing behavior.
An example of game theory in practice would be if two potential employees are going for the same promotion at work and are conversing with their employee about the job.
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This course focuses on the economic and organizational conditions that shape technological innovation by firms. The intent is for students to learn core concepts that can make innovation initiatives
Introduction to the economics of information and its strategic ramifications. The main objectives are to use economic theory to understand strategic interactions in the presence of uncertainty, estima
We study the role of information in equilibrium asset pricing models. We cover simple one-period models of incomplete and asymmetric information using competitive rational expectation equilibria and B
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Dans une première partie, nous étudierons d’abord comment résoudre de manière très concrète un problème au moyen d’un algorithme, ce qui nous amènera dans un second temps à une des grandes questions d
Dans une première partie, nous étudierons d’abord comment résoudre de manière très concrète un problème au moyen d’un algorithme, ce qui nous amènera dans un second temps à une des grandes questions d
Curiosity refers to the intrinsic desire of humans and animals to explore the unknown, even when there is no apparent reason to do so. Thus far, no single, widely accepted definition or framework for curiosity has emerged, but there is growing consensus th ...
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This work studies the learning process over social networks under partial and random information sharing. In traditional social learning models, agents exchange full belief information with each other while trying to infer the true state of nature. We stud ...
We conduct two survey experiments to study which information people choose to consume and how it affects their beliefs. In the first experiment, respondents choose between optimistic and pessimistic article headlines related to the COVID-19 pandemic and ar ...