Unit 5:
Economics of Information 8
LHs Asymmetric information: concepts and determinants; Asymmetric information
and digitalization; Online search engines; Artificial intelligence; Strategy
and the new economics of information; Effects of digitalization on consumer
choice and labor markets; and Intellectual property and digitalization.
The
Economics of Information is a branch of microeconomic theory that studies how
information and information systems affect an economy and economic decisions.
In traditional economics, models often assume "perfect information,"
but in reality, information is a commodity that is costly to produce and
distribute, leading to market imbalances.
Information
In its
most fundamental sense, information is data that has been
processed, organized, structured, or presented in a given context to make it
meaningful, useful, and interpretable for decision-making, understanding, or
communication.
Key
differentiators from raw data:
- Data are raw, unprocessed facts (numbers, symbols,
text).
- Information is data endowed with relevance and
purpose. It answers questions like "who," "what,"
"where," and "when."
Crucially,
information reduces uncertainty. When you receive information, your
knowledge state changes, allowing you to make more informed choices.
Information
in the Context of the Digital Economy
In the digital economy—where economic activities are based on digital computing
