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Information Economics

An annotated collection of 5 books & papers on information economics, spanning 1961 to 1998. Featuring works by George J. Stigler, George A. Akerlof, A. Michael Spence and 2 more — each with editorial commentary oriented to digital product practice.

The Economics of Information

George J. Stigler, 1961 · Journal of Political Economy, Vol. 69, No. 3

Stigler's opening move in what became the economics of information: if information is costly to acquire, then price dispersion in a market is not a sign of irrationality but the rational equilibrium outcome of search beh…

The Market for 'Lemons': Quality Uncertainty and the Market Mechanism

George A. Akerlof, 1970 · The Quarterly Journal of Economics, Vol. 84, No. 3

Akerlof's foundational demonstration that information asymmetry alone can destroy a market. Using the used car trade as his model — where sellers know whether a car is good or a "lemon" but buyers cannot tell — he shows…

Job Market Signaling

A. Michael Spence, 1973 · The Quarterly Journal of Economics, Vol. 87, No. 3

Spence's canonical model of how agents in markets with asymmetric information use costly signals to reveal their type. The original setting is the labour market: employers cannot observe worker productivity before hiring…

The Economics of Information: An Exposition

Kenneth J. Arrow, 1996 · Empirica, Vol. 23, No. 2

Arrow, the Nobel laureate who formalised the economics of uncertainty and information asymmetry, distills his life's work into a short exposition. The central argument is that markets for information do not behave like m…

Information Rules: A Strategic Guide to the Network Economy

Carl Shapiro & Hal R. Varian, 1998 · Harvard Business School Press

Shapiro and Varian's book is the cleanest account of the economics that governs information goods — zero marginal cost, network effects, lock-in, switching costs, versioning, standards wars. Written in 1998, before the d…