ITGS Syllabus

Sunday, January 01, 2006

Topic 1

The economic value of information by Kent Harvath


Since computers and internet developed a wide informational system, much information than ever has been available on internet. Though most of the information is free here, it is reasonable that in such environment, there are people who try to make money out of information on internet, creating a market for information on internet. There had been market for information on books, but internet has made it easier to access information and increased the number of information accessible, and therefore greatly affected the market for internet and the economic value of information. Some people consider this information economy to be the next phase of economy following hunting, agriculture, and manufacturing economy.

The market has now been entirely on internet. They advertise the product on internet. The customers look at it on a web page. They order it through internet and the purchased information is sent completely as data, many times called e-book. There also are numerous articles that charge money to read. The value of information has increased for both business people and customers. Information is now a profitable product. It is also suitable for earning money because the production cost is almost zero. It does not cost to duplicate the information because it is purely data, and there is no need to hire workers. This not only increases the profit, but also decreases the risk which is not a problem if it does not sell well. The fact that the price of e-books are actually high (above $10.00) regardless of low cost suggests that the demand is high as well. ebook prices

Thus, these people involved in the internet market for information benefits from this increase in economic value of information. The people who suffer from this are people involved in old market of information such as books. Due to the law of substitutes, the demand for books results decreased by the increase in demand for e-books.

One social issue that may occur by the increase in economic value of information is that economic value of other products may lower. Despite the increase in economic value, information itself is useless in many circumstances. It can not substitute for food, stationary, houses, or any other things that form the basis of our living. Since it is easier and much more efficient to earn money by information on internet, many businesses would concentrate on information, and the competition for other field would be less and incentive to innovate would be lowered in that area.

Though this internet market on information seems to be very efficient, there are problems that could occur within it. One problem is anonymousness. It is easier to deceive people. Much information could be plagiarized information. Also, in many cases, advertisement on the web page makes the information look to be really useful, and the price may be very expensive, but the information itself is really poor. The problem here is unreliability. So many things are unclear on internet that these social and ethical problems arise. Due to the fact that the information economy is just in the stage of development, there still aren’t many laws that regulate these problems yet.

Another ethical problem that arises is black markets of information. An example would be a list of e-mails sold. It could be a list of e-mails of people who are interested in certain things and people buy it to send advertising mails. Or it could be a list of e-mails of not intelligent people who got tricked by some information product which is purchased by people who intends to trick people. Anyhow, the development in informational network also encourages this kind of trade as well.

Thus, the economic value of information has increased due to development of computers and internet.


Joseph Toyoshima said...

Wonderful!
It clearly explains how information economy is and the issues related to it.

November 21, 2006 7:43 PM


Sujit_George said...

Money is important in the world, so it is right for them to get more money than usual. I agree with what is being said in this report.

November 21, 2006 7:43 PM


Dhruv Rajashekaran said...

A good, organized collection if information related to the 'economics' of information. Economic analysis, for example in relation to explaining the high costs of e-books. I was not aware of the reasons earlier.

November 26, 2006 7:49 PM


Chun said...

This report explains very well about economic value of information. I didn't know that the production cost was zero, I find that amazing. I think this is a great report, but I would appreciate if you had put the total benefit of e-book or others. It might be not exact and hard to find but I think it would help me understand how huge the benefit is.

November 27, 2006 3:46 AM


Vaibhav said...

After reading your article I have now come to realize how the value of information has become highly valuable as a result of the internet. Internet is now a source where anyone can easily share or sell their knowledge and hence this is raising the economic value of information.

November 27, 2006 3:48 AM


Tommy Chuang said...

Prior to reading your article, I was unaware of how the information industry is so large. Are there any ways in which black market information can be countered?

November 27, 2006 7:09 PM


heejunson said...

It is very true that after internet was introduced it became much easier to access information . As you mentioned on your essay, internet markets are indeed very beneficial. Your essay is easily understood and has clear expression on economic value of information. I'd better check out black markets!

November 27, 2006 7:19 PM


Andrew said...

Money is important in the world,I didn't know that the production cost was zero, I find that amazing. Internet is now a source where anyone can easily share or sell their knowledge and hence this is raising the economic value of information. Your essay is easily understood and has clear expression on economic value of information.

November 27, 2006 7:24 PM


kaerujin said...

Your paper is clearly explained and also clearly shows the issue about online buying which is becoming an increasing method used by a alot of people. It could help a lot if you went a little further but its good to bring up this issue.

November 27, 2006 7:29 PM


Taro said...

Wonderful!
By reading this essay, I have now understood how the internet increased the economic value of information by making it easier to share and access. This essay is easily understood and basically great!

November 27, 2006 7:32 PM


Romeo Wu said...

I don't think the value of imformation should increase becasue of the internet since internet can share imformations so easily, therefore the value of the imformation should decrease.

November 28, 2006 7:32 PM


sam_shobeiri said...

I like how this article is addressing the fact that information on the internet is quickly replacing hard copied information.

I think you could have also mentioned another problem with computer based data; the fact that it could be lost in a matter of seconds as it is not "real". One crash of the computer can easily erase all data.

November 28, 2006 7:33 PM


Oli said...

Ah what an economics paper

Interesting point about how digital information is worth more than the analog substitute. It seems like it would have went the other way.

November 29, 2006 5:30 AM


Simon Ruiz said...

The connection between economics and networks has been a very crucial progress in society and this essay well explains and portrays it.

November 29, 2006 7:33 PM


ronniewonnie said...

Excellent Essay!
It explains very well how money and information is very important to the world economicall, socially, and ethically. It clearly lays out the social and ethical issues.
The section about black markets was primarily interesting.
Ronald Chu

December 11, 2006 6:40 AM


Simon Ruiz said...

Would the crash in data within the hardware cause the economy to fall in the short run or long run? If so, how would the consequence take place?

December 14, 2006 5:58 AM


moyer said...

I agree that the value of information has become very valuable. I believe it is because of the internet, and you also mentioned that. As the internet becomes more reliable, the value of information I think will increase more and more

December 17, 2006 3:15 AM


5 Comments:

Blogger XiaoxiaoLi said...

I have always known that the information market is big, but not THIS big. What an informative paper with a combination of economics and information. The internet, you mentioned is certainly the main reason behind this “age of information.” As the internet continues to grow and evolve, so will the volumes of information!

January 08, 2007 12:37 AM  
Blogger akirajackson said...

information costs a whole lot of money these days. I even saw people doing auction for the information on some site.

January 16, 2007 7:53 PM  
Blogger akirajackson said...

information costs a whole lot of money these days. I even saw people doing auction for the information on some site.

January 16, 2007 7:53 PM  
Blogger Haider said...

I like how you discuss the problems of unreliability with digital information.

January 25, 2007 2:10 PM  
Blogger Wonbae said...

Um, some issues that you haven't mentioned in detail... such as free online books( piracy, perhaps?). How can you describe the trend of posting resources for free? How would this be described in economic terms? I'm inclined to believe that the growth of the internet and computers does not necessarily mean that people would use it as a medium to create revenue. However, in general, I like the way your approached the question.

April 09, 2008 12:38 PM  

Post a Comment

<< Home