Question

Discuss The Economics of Information in the second half of the 20th Century (maximum 1,000)

Answer 1

ECONOMICS OF INFORMATION

The economics of information or information economy is a branch of microeconomics theory that studies how informations and information systems can affect the whole economy.

It is an exchange of Knowledge information instead of any physical goods and services.Wrong information leads to wrong economic decisions which leads to econoic crisis.

once information ids spread hard to control it.

Economists who were aware of the information economy are mainly smith, marshall, weber, sisomondi, and mill

FEATURES:

1. Influence on economic decision making and the whole economy
2. Also affect the price mechanism
3. Growth of the economy

20th Century was a century that began on jan 1 1901 and ended on december 31 2000

Alfred Marshall, and other 19 and 20 th century economists have talked about the probelm of imperfect information.f

For instance, Economist adam smith wrote that if a firm raises interest rates the borrowers wil drop out of the market.

Alfered Marshall also stated that efficiency way literature in recognising that paying workers high wages may increase thier productivity. implicitly, he recognised that workers were frequently not paid on the basis of the performance

one of the main reasons fo this is the inabilty to obesrve the tasks perfectly either the inputs or the outputs.

from the above cases , both marshall and smith observed the probelm of wrong information or imperfect information and recognised thier importance.it wil only complicate the economic anaysis.

Alfred Marshall also conveyed that as long as information was not too imperfect , economics with almost perfect information would look very much like with perfect information close enough that the idealised models would suffice.like classic assumptions of traditional economics , perfect capital market. where there was a general recognition that capital markets were not perfect

CONCLUSION

The information economics that has been developed over the past century. The role of information explains the border arraay of institutions and behaviour. For instance how the individual process the information form expectation and select from the possible signals .

the creation of social knowledge and signaling conventions. How well the individuals , firms and societies can absorb the new information , or learn adapt their change in behaviour.

Mainly how to use these knowledge and  information in an effective way and optimize the utilization of this new economic information for the better outcome.