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.

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.

Integrity refers to correspondence of data with itself, at its creation. Data lacks integrity when it has been changed accidentally or tampered with. For example, a hacker might change driver license data resulting in arrests of innocent people.

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25th of August 2010 - Read this Article today and answer the questions on this paper.