THE DIGITAL PROVIDE: INFORMATION (TECHNOLOGY), MARKET PERFORMANCE AND
WELFARE IN THE SOUTH INDIAN FISHERIES SECTOR
When information is limited or costly, agents are unable to engage in optimal arbitrage. Excess price dispersion
across markets can arise and goods may not be allocated efficiently; in this setting, information technologies may
improve market performance and increase welfare. Between 1997 and 2001, mobile phone service was introduced
throughout Kerala, a state in India with a large fishing industry. Using micro-level survey data, we show that the
adoption of mobile phones by fishermen and wholesalers was associated with a dramatic reduction in price
dispersion, the complete elimination of waste and near-perfect adherence to the Law of One Price. Both consumer
and producer welfare increased.
I would like to thank two anonymous referees, Reuben Abraham, Christopher Avery, Satish Babu, Suzanne
Cooper, Peter Cherian, Thomas DeLeire, Edward Glaeser, Sebastian James, C.M. Jolly, X. Joseph, Nolan Miller,
C.K. Muhammad, Prakash Nair, Mai Nguyen, M. Philip, P. Philip, Lant Pritchett, V. Rajan, T.K. Sidhique, Joseph
Thomas and Richard Zeckhauser for valuable comments.