Question

What is the relationship between information and decisions... bad or good? Think of fun dates versus bad dates, divorces, stock purchases, etc. Acquisition of information is a real cost! Economists call such costs "transaction costs."

Answer 1

Information means collection of data through primary and secondary sources.while decision means taking steps towards achieving targets.Decisions are taken on the basis of right and relevent information.Hence in a organisation information is very important for taking decisions regarding,management of employess,management of workers,management of stock etc.

When information is good then its motivate and encourage to do work continuously but if information is bad then it affect decision making.

For eg - due to covid -19 business is affected badly .Stock markets are going down day by day .There is no progress regarding economic activity hence when market receive this news of spreading virus then its affect all the financial decision.when market receive any good information then its boost up.

Acqusition of information is real cost because for collecting information we have to do many expense.there are two types of sources of information.1 primary and 2) secondary source.when a person collect information through his sources then he has to do door to door survey while he collect information through secondary sources then he has to collect information .Hence in both the sources he has to do more expenses.hence it is like a transaction cost.

Collection of information is difficult task because business requried accurate information hence lots of planning is requried before going through.

Collection of data from competitive companies requires hard work.accurate information plays a vital role for business.