Economics Dictionary of ArgumentsHome
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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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Friedrich A. von Hayek on Information - Dictionary of Arguments
Boudreaux II 66 Information/price/economic cycle/Hayek/Boudreaux: Economic cycles: adjustments in production activities (…) are not instantaneous. They take time. >Relative prices, >Price, >Economic cycle, >Recession, >Depression. Unemployment: Unemployment rises during the time it takes for these adjustments to be made. Workers in industries with unsold inventories are laid off, and time is required for them to find employment elsewhere. Even industries that expand in response to more accurate prices typically require some time to rearrange their production plans and facilities in order to make profitable the hiring of new workers. The time it takes for the firms to adjust away from the production plans they made when prices were inaccurate is time during which unusually large numbers of workers are unemployed. Unemployment: Such unemployment is not caused by too little aggregate demand. Therefore, such unemployment cannot be cured by more government spending or other efforts to raise aggregate demand. Instead, such unemployment is caused by the widespread failure of individual prices to convey accurate information to entrepreneurs and investors about what specific products they should produce and about how best to produce these products. The only way to cure this malinvestment is to allow prices to adjust so that they better reflect consumer desires and the realities of resource availabilities. This cure, again, requires time - time for prices to adjust and for workers to find and move to jobs that are more economically sustainable. >Monetary policy/Hayek. - - - Sunstein I 14 Information/prices/markets/Hayek/Sunstein: a pricing system, as suggested by Friedrich August von Hayek, can help in solving the problem of how (implicit) pressure is exerted in group discussions to withhold potentially crucial information. This has a pronounced effect on the gathering of information. Markets/Hayek: Markets create prices for goods in a way that processes scattered information distributed among very different people. In markets, participants have an extreme incentive to be right. Some information may remain "hidden", but when it comes to making a profit, this information will not be hidden for customers and investors for long. For this reason, market prices reflect a high degree of information.(1) Sunstein: You could say that markets create something like a "Daily Us" see Filter bubbles/Sunstein. SunsteinVsHayek: However, his argumentation had a blind spot. Markets can also process false information. Styles can lead to inflationary prices. This can also affect land and real estate prices. >Markets/Sunstein, Markets/Hayek. I 132 Prediction markets/forecast markets/Sunstein: Examples where information markets are efficient: For example, to recognize tendencies of air pollution, to observe deficits in public budgets (2). For example, tracking outbreaks of diseases and predicting their spread or monitoring the solvency of institutions.(3) I 137 Manipulation: Candidate Pat Buchanan's supporters bought large quantities of shares in the IEM (Iowa Electronic Market, a prediction market for elections) in 2000 to manipulate the prediction. However, better informed investors subsequently took advantage of this. 1. Friedrich Hayek, Law, Legislation, and Liberty, vol. 1: Rules and Order (Chicago: University of Chicago Press, 1973) p. 13. 2. See Abramowicz, “Prediction Markets, Administrative Decisionmaking, and Predictive Cost-Benefit Analysis,” pp. 990–92. 3. ibid. pp. 987-90._____________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 [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Hayek I Friedrich A. Hayek The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) Chicago 2007 Boudreaux I Donald J. Boudreaux Randall G. Holcombe The Essential James Buchanan Vancouver: The Fraser Institute 2021 Boudreaux II Donald J. Boudreaux The Essential Hayek Vancouver: Fraser Institute 2014 Sunstein I Cass R. Sunstein Infotopia: How Many Minds Produce Knowledge Oxford 2008 Sunstein II Cass R. Sunstein #Republic: Divided Democracy in the Age of Social Media Princeton 2017 |
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