BUSINESS
Week 7 Macroeonomics of Information

Week 7 Macroeonomics of Information - EBS2023 Information...

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EBS2023 Information Economics Macroeconomics of Information Faculty of Economics & Business Universiti Malaysia Sarawak
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The story of the economics of information is the history of struggles over how to understand the increasing information intensity of our social and economic lives.
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Neoclassical economic thought avoided informational problems; however, the resulting inconsistencies, paradoxes, and failures led to a new stage of theoretical development. The transformation in economics once it began to deal directly with informational issues has been dramatic.
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The transformation in economics once it began to deal directly with informational issues has been dramatic.
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the role of information in the economy is, of course, ancient. the very earliest written records document economic activity. Historians of economic thought typically place the originsof modern economic ideas in the 18th century, with Adam Smith
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Basic ideas about the nature of the economy developed during this period, establishing the framework within which information has come to be understood. By the 19th century, many thinkers identified problems we now understand as information- based even though other language was used to describe those issues and the implications of their insights were not always recognized.
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Economics in Transition the economics of information was receiving considerable attention by the 1980s did not mean that all economists agreed on the approach to be taken. Poles in the battle over how to think about information from an economic perspective were marked on one hand by Stigler (1983), whose 1982 Nobel lecture took the position that the economics of information had long been accommodated by standard economic theory, and on the other by Arrow (1974a), who insisted that the very foundations of traditional economics had to be challenged in order to adequately think through informational problems.
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Economics in Transition Conceptualizations of the information economy also began to diverge . Even among those convinced of the centrality of information to economic thought, there is concern over a lack of clarity in fundamental concepts. Spence's (1974) - the economics of information was that its development was proceeding and Repo's (1987) & Boyle's (1996)- complaint that research in the area was conceptually vague description of pertinent theory as "so indeterminate that it frequently functions as a Rorschach blot for dominant social beliefs and the prejudices of the analyst.“ Arrow (1996) put it, economists are nowhere near having even a "sort-of good theory" about how to balance the social need to use information and the rights of intellectual property holders .
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Economics in Transition Often information is treated simultaneously as something that is free, complete, instantaneous, and universally available and as a commodity that is costly, partial, and deliberately restricted in its availability .
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