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

It can be mentioned that from the perspective of an economist information and decision have a good relationship. This is because of the fact that there are many that are underlying due to this and for example asymmetric information is one such theory in economics which tells us that how lack of information might actually lead to adverse selection and decision making of the whole. this is true that acquisition of information is a real cost because it is not easy to get all the sources of data when you want to take a decision and a proper analysis team must be formed in order to understand whether the decision on the basis of the information available can be made or not but this always can be of good result because considering stock market variations and when there is no information about the internal happenings of a company then you cannot predict what will happen in the future and continue to invest in that is what happened in the case of Yes Bank of India where the stock prices fell very high and in this regard you have to understand that information is something that it is very vital in the process of decision making even though it occurs at a transactional cosy because the losses can be huge. and for instance it is important for things such as stock purchase and the government policies information to keep in mind while making a particular decision