Economics Dictionary of Arguments

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Information, information theory: A character or a character combination contains information when it is clear to the recipient that this character or the character combination appears instead of another possible character or a possible character combination. The supply of possible characters determines to a part the probability of the occurrence of a character from this supply. In addition, the expected probability of the appearance of a character can be increased by already experienced experiences of regularities. The amount of information transmitted by a character depends on the improbability of the occurrence of the character.

Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments.

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Yochai Benkler on Information - Dictionary of Arguments

Benkler I 36
Information/Arrow/Benkler: As Kenneth Arrow put it in 1962, “precisely to the extent that [property] is effective, there is underutilization of the information.”(1)
Benkler: Because welfare economics defines a market as producing a good efficiently only when it is pricing the good at its marginal cost, a good like information (and culture and knowledge are, for purposes of economics, forms of information), which can never be sold both at a positive (greater than zero) price and at its marginal cost, is fundamentally a candidate for substantial nonmarket production.
I 37
From the perspective of a society’s overall welfare, the most efficient thing would be for those who possess information to give it away for free—or rather, for the cost of communicating it and no more.
Nonrivalry, moreover, is not the only quirky characteristic of information production as an economic phenomenon. The other crucial quirkiness is that information is both input and output of its own production process. In order to write today’s academic or news article, I need access to yesterday’s articles and reports.
Benkler I 311
Information in developed countries/Information Goods/Information/Benkler: One can usefully idealize three types of information-based advantages that developed economies have, and that would need to be available to developing and less-developed economies if one’s goal were the improvement in conditions in those economies and the opportunities for innovation in them.
1. Information-Embedded Goods: These are goods that are not themselves in formation, but that are better, more plentiful, or cheaper because of some technological advance embedded in them or associated with their production. Pharmaceuticals and agricultural goods are the most obvious examples in the areas of health and food security, respectively. While there are other constraints on access to innovative products in these areas—regulatory and political in nature—a perennial barrier is cost.
I 312
2. Information-Embedded Tools: One level deeper than the actual useful material things one would need to enhance welfare are tools necessary for innovation itself. In the areas of agricultural biotechnology and medicines, these include enabling technologies for advanced research, as well as access to materials and existing compounds for experimentation. Access to these is perhaps the most widely understood to present problems in the patent system of the developed world, as much as it is for the developing world—an awareness that has mostly crystallized under Michael Heller’s felicitous phrase “anti-commons,” or Carl Shapiro’s “patent thicket.”
I 313
3. Information: The distinction between information and knowledge is a tricky one. I use “information” here colloquially, to refer to raw data, scientific reports of the output of scientific discovery, news, and factual reports. I use “knowledge” to refer to the set of cultural practices and capacities necessary for processing the information into either new statements in the information exchange, or more important in our context, for practical use of the information in appropriate ways to produce more desirable actions or outcomes from action. Three types of information that are clearly important for purposes of development are scientific publications, scientific and economic data, and news and factual reports.
>Information/Arrow, >Terminology/Benkler.
I 314
4. Knowledge: In this context, I refer mostly to two types of concern. The first is the possibility of the transfer of implicit knowledge, which resists codification into what would here be treated as “information”—for example, training manuals. The primary mechanism for transfer of knowledge of this type is learning by doing, and knowledge transfer of this form cannot happen except through opportunities for local practice of the knowledge. The second type of knowledge transfer of concern here is formal instruction in an education context (as compared with dissemination of codified outputs for self-teaching).
I 315
Here, there is a genuine limit on the capacity of the networked information economy to improve access to knowledge. Individual, face-to-face instruction does not scale across participants, time, and distance. However, some components of education, at all levels, are nonetheless susceptible to improvement with the increase in nonmarket and radically decentralized production processes. >Terminology/Benkler.

1. Kenneth Arrow, “Economic Welfare and the Allocation of Resources for Invention,” in Rate and Direction of Inventive Activity: Economic and Social Factors, ed. Richard R. Nelson (Princeton, NJ: Princeton University Press, 1962), 616-617.

Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments
The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.

Benkler I
Yochai Benkler
The Wealth of Networks: How Social Production Transforms Markets and Freedom New Haven 2007

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