What is Information Economics?

Information economics originated in the 1940s, developed in the 1950s and 1960s, and basically matured in the 1970s. In the early days of creation, there were various research focuses. Some scholars focused on basic theoretical research, and some scholars focused on applied research. It is the complementarity and mutual promotion of these two studies that have established the theory of information economics. basis. After entering the 1970s, the development of information economics has basically reached maturity, which is marked by the emergence of a large number of monographs on the information economy. For example: "Information Economics" by Horowitz in the United States, "Information Economics-Standards for Calculating Costs and Benefits" by Wilkinson in the United Kingdom, and "Information Economics" by Yoshida Soda in Japan.

Information economics

(Subject name)

The earliest researcher in macroinformatics economics was Professor F. Machlup of Princeton University. He published a monograph in the United States: "Knowledge Production and Distribution in the United States" in 1962, which raised the issue of the knowledge industry and made statistical measurements of the production of the United States knowledge industry in 1958. The book was translated into Russian in 1966 and Japanese in 1968. Since 1980, Marklupe has extended the previous book and successively published eight volumes of "Knowledge: Its Production, Distribution, and Economic Significance." The first volume is called Knowledge and Knowledge Production. The second famous early researcher, when pushing

[Introduction]

Information economics is a branch of information science. It is a science that studies the economic phenomena of information and the characteristics of its movements. Its main research contents include:

1. The economic role of information. Mainly study the economic attributes of information and its role in economic development; the status and function of information industry in the national economy; the impact of the development and improvement of information technology on social economy; the scale, structural form, and organizational management of information and social production Relationship; the application process and role of the information economy model in the economic structure.

2. The cost and value of information. main research

[From traditional economics]

Traditional economics believes that price condenses all market information, and it is obtained at no cost, so it can be freely used by all market participants. In this way, market participants have complete information on market operation. The interaction between decision-making individuals is included in the price through the market, and direct economic linkage is not the same as interaction. Therefore, direct interactions or economic connections do not form part of traditional economic analysis. This implies that traditional economic analysis does not contain private information, that is, there is no asymmetry of information. The rational person hypothesis has two meanings: one is "self-interest" and "efficiency", that is, "selfishness" and "maximization of benefits"; the other is that the decision maker has complete information for making decisions. Complete information determines that reason is complete, and individual reason can reach collective reason spontaneously. In this way, decision-making individuals make decisions under a given information parameter, price, and the interactions between individuals are included in the price through the market. The price mechanism contains all the content of market economic activities, and the market mechanism is equivalent to incentives. The full content and means of restraint. Through the role of the "invisible hand" of the market, individual rationality spontaneously reaches collective rationality, the market is always clear, and the entire economy and society will eventually reach the ideal statethe Pareto optimal state.

[From Information Economics]

Information economics believes that prices are obtained in search at the cost of paying. Therefore, the information is incomplete. This determines that competition is incomplete, there is a direct interaction and influence between decision-making individuals, and private information plays an important role. Therefore, the information is asymmetric. Under the conditions of incomplete and asymmetric information, complete rationality is transformed into bounded rationality, that is, the economic individual is selfish and acts on the principle of maximization, but he usually does not have the information needed to make the optimal decision. Therefore, the economic individual Ability is limited, and reason is limited. The result of individual rational choice may be irrational, and individual rationality does not necessarily lead to collective rationality. In this way, the direct interaction and influence between individual decision-making individuals becomes the starting point of economic analysis. Through the analysis of the mechanism of action of information, especially private information, information economics reveals that individual rationality may lead to collective irrationality, and that prices cannot encompass all market economic relationships. Therefore, the market price system is no longer the entire content of incentives and constraints And means, the "non-price" mechanism has become an indispensable content for incentive constraints. The information economy uses mechanism design theory to design a "non-price" system to solve this problem.