Information economics


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Information Economics

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  • Information economics

    1. 1. INFORMATION ECONOMICS Presented by Shri Ram Pandey NCSI, IISc Bangalore- 560012
    2. 2. What is Economics? <ul><li>Activities undertaken to provide for the satisfaction of desires based on production and consumption. </li></ul><ul><li>Traditionally, economic analysis is focused on resource scarcity, demand, supply, and exchange. </li></ul>
    3. 3. What is Economics? <ul><li>Economics is the study of how people choose to use resources. </li></ul><ul><li>Resources include the : </li></ul><ul><li>1.Time and talent people have available, </li></ul><ul><li>2.The land, buildings, equipment, and other tools on hand, and </li></ul><ul><li>3.The knowledge of how to combine them to create useful products and services. </li></ul>
    4. 4. Do you agree? <ul><li>“ 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.” </li></ul>
    5. 5. Information economics “ Information economics treats information explicitly as a resource” Information economics is a branch of microeconomic theory that studies how information affects an economy and economic decisions.
    6. 6. New Opportunity <ul><li>From an economic perspective, the economy is becoming more information intensive. </li></ul><ul><li>The production, use and communication of information assumes the central importance in the information era that mass production of ordinary goods and services assumed in the industrial era. </li></ul>
    7. 7. <ul><li>The value of information is not quantifiable, its value depends on “context and use” </li></ul><ul><li>There is a great deal of difference between personal and group or organizational use of information. The division of information gathering may well be the most fundamental form of the division of labour. </li></ul><ul><li>The cost of producing information is independent of the scale on which it is used . </li></ul>Economics characteristics of information
    8. 8. <ul><li>Learning takes time so that there is a limit to the rate at which decision makers can absorb information. </li></ul><ul><li>There are usually significant information differentials in terms of possession of information, access to information and capacity to use information. </li></ul><ul><li>The greater part of the cost of information is often the cost incurred by the recipient </li></ul>
    9. 9. <ul><li>The output of the information sector is used to a significant extent by industry as opposed to consumers. </li></ul><ul><li>The complexity of information activities makes information as a resource difficult to contain within the traditional production function mode of analysis. </li></ul>
    10. 10. Information economics & intellectual property law <ul><li>What do we mean by information in this case? </li></ul><ul><li>-News, new ideas and inventions, music, etc </li></ul><ul><li>Information is produced at high cost , but, as soon as it leaves </li></ul><ul><li>the producer, it can be copied and transmitted at low cost. </li></ul><ul><li>Difficult for the producer to sell information at a price much </li></ul><ul><li>higher than the transmission cost – the problem of </li></ul><ul><li>Non appropriability. </li></ul><ul><li>Examples : Software and music are unlawfully copied and sold, </li></ul><ul><li>inventions are stolen and exploited, news is resold etc. </li></ul><ul><li>Compare to ”ordinary” goods as for example cars... </li></ul>
    11. 11. <ul><li>Thank you! </li></ul>