Information economics

Definition of Information economics

In the discipline of information economics, the study involves the theory of microeconomics that tells how information and information system have an effect on economy and economic decisions. The complications occur when information which is easy to create become hard to trust, easy to spread become uncontrolled. These special characteristics influence many decisions in economic theories.

Books on Information economics

Book 1:

The Economics of Information, Volume 4 By Kenneth Joseph Arrow (published by Harvard University Press, 1984)

Book 2:

Blown to Bits: How the New Economics of Information Transforms Strategy By Philip Evans, Thomas S. Wurster (published by Harvard Business Press, 2000)

How Information Economics works?

Theories say that it is wise to know information, the facts, and also important what others know as to gain the strategic aspects. For example,

The Nathan Rothschild Waterloo legend,

Baron Nathan de Rothschild was the first to come to know about the napoleon’ defeat in the final battle of Waterloo by a courier services that he has established. After learning the fact, he started to sell British stock and government debt to make sure that his men buy those shares in cheap.

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