Information Economics
Melanie J. Norton, “Introductory Concepts in Information Science”
Chapter 6, “Information Economics”
Chapter 7, “Interpretations of Value”
pp 79-107, Information Today Inc., 2000
Lester & Koehler, “Fundamentals of Information Studies”
Chapter 8, “The Economics of Information”
pp 161-178
Discussion led by:
Kevin Lynch, Ed Sobczak, Raja Sztorc, Lucinda Steinhauser,
and Elizabeth Teegarden
What is Economics?


Activities undertaken to provide for
the satisfaction of desires based on
production and consumption.
Traditionally, economic analysis is
focused on resource scarcity,
demand, supply, and exchange.
Introductory Questions
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Why were we asked to read Chapter
6, with all the economics lessons?
Why did we read this combination
of chapters (that is, how are they
related)?
What could informatics/information
science students gain from all of
this information?
Information as an Economic Entity

Technology

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Is information a resource?


Haves and have-nots
How does it differ from traditional
resources?
Is information a commodity?
Internet Population Penetration % in 2006
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an
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ica
a
La
tin
No
rth
Am
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ic
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st
id
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Eu
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pe
As
ia
Af
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a
80
70
60
50
40
30
20
10
0
http://www.internetworldstats.com/stats.htm
Do you agree?
“However information is perceived
and treated in the past, it is being
treated more and more as a
commodity that can be owned,
controlled, and traded in the
market.”
Applying Economic Models
What is the difference?

Macro Economics

Micro Economics
Information as a Commodity
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
Shannon-Weaver model and
Economics of Information
Traditional Value Propositions

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Cost/benefit analysis. Public Goods?
Renovation and Mutation
Organizational Impact
Uncertainty and Models
Role of the Government
Traditional Value Propositions

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What are the differences between
resources in the traditional
economic sense and information as
a resource?
Why is this distinction important?
Value of Information
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Is the price we pay for information
reflective of the quality of
information?
How do we price information in our
daily lives?
What is the value to us if we buy a
book or a magazine or print a
document?
Measurability of Information


Buying a house vs. buying a
software program
Why is a contractor not entitled to
improvements on a house, but a
programmer is entitled to
improvements based on his
database?
Renovation and Mutation of Information
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
With Renovation it is easy to see how new
valuable information can be produced.
How viable is the mutation process as a
source of new useful information?


Author states that errors in chemical formulas
and errors in interpretation can lead to better
results?
How often does this happen? Examples?
Organizational Impact
What are the consequences of integrating
communication technology into an
increasing number of organizations, such
as libraries, schools, government
processes?
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Efficiency?
Ease of use?
Investment $$$?
Reliance on communication channels?
User training?
Uncertainty and Game Theory
How does this relate to Information
Economics?


Reduced uncertainty leads to increased
information value?
Research is set up with a set of specific
rules to yield valuable results?
Creating and Applying Models
How do we define and use a model
as described in the reading?


A documented research process?
An experiment that can be repeated
and examined to allow for further
investigation into the subject matter?
Role of Government in Information
Economics
Should the public know all
information exchanged among
individuals?


Communications between officials?
Role of the media?
Role of Government in Information
Economics
Should all information
dissemination be a political process?

information classified depending on
what kind of ‘good’ it provides, also on
who is creating the information
Role of Government in Information
Economics


What role do political agendas play in the
advancement of research, availability of
information, and application of
information?
Is government intervention in these
matters a good thing?


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Alternating policies between administrations
causing setbacks?
Providing grants and means for information to
spread?
Specific examples?
Applications of Information Technology
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
Manufacturing and industry use
information technology to improve
timeline estimates on projects and to
enhance competitiveness by saving
money for customers by meeting or
beating deadlines.
The use of better gathering and
implementation of information from point
of sale by large retailers improves product
purchasing, helps maintain balance of
inventory, identifies regional product
preferences.
Applications of Information Technology
How many people have noticed
certain companies that have
changed to or evolved to help the
consumer’s needs and wants?
Applications of Information Technology
As technology improves and we
become more of a faceless society,
how will this impact our culture?
Good or bad?
Applications of Information Technology
As technology grows and we
become more and more dependent
on it, how will this effect the
business in the future?