The Economics of Information: An Exposition

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 markets for ordinary goods — information is costly to produce, nearly free to reproduce, and its value is unknown before you acquire it, which creates a cascade of market failures that shape every knowledge-intensive industry. For product direction the paper is foundational: every pricing conversation, every SaaS model, every debate about free tiers and paywalls is an applied version of Arrow's problem. Read alongside Shapiro and Varian's Information Rules for the operational companion, and Simon's Designing Organizations for the attention-side corollary. Short, dense, canonical.