The Economics of Information, Volume 4

Front Cover
Harvard University Press, 1984 - Business & Economics - 284 pages

Unlike the papers of some other great economists, those of Kenneth Arrow are being read and studied today with even greater care and attention than when they first appeared in the journals. The publication of his collected papers will therefore be welcomed by economists and other social scientists and in particular by graduate students, who can draw from them the deep knowledge and the discernment in selection of scientific problems that only a master can offer. The author has added headnotes to certain well-known papers, describing how he came to write them.

This volume begins with Arrow's papers on statistical decision theory, which served as a foundation for his work on the economics of information. As he writes in his preface, "Statistical method was an example for the acquisition of information. In a world of uncertainty, it was no great leap to realize that information is valuable in an economic sense." The later, applied papers, which operationalize the theory of the early ones, include essays on the demand for information, the economic value of screening devices, and the effect of incomplete information on the structure of organizations, futures markets, and insurance.


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Published long before the commercialization of the Internet and widespread use of personal computers and mobile devices, this work almost signals the coming Digital Economy. It highlights the economic and strategic value of information. The author is also known for his work on endogenous economic growth. This is also worth reading since there is emphasis on information intensive activities, human capital, and innovation.  


Bayes and Minimax Solutions of Sequential Decision Problems
Admissible Points of Convex Sets
Statistics and Economic Policy
Decision Theory and Operations Research
Decision Theory and the Choice of a Level of Significance for the tTest
Insurance Risk and Resource Allocation
Statistical Requirements for Greek Economic Planning
Further Comment
Information and Economic Behavior
Limited Knowledge and Economic Analysis
On the Agenda of Organizations
Vertical Integration and Communication
Some Recent Theoretical Developments
The Property Rights Doctrine and Demand Revelation under Incomplete Information
Allocation of Resources in Large Teams
On Partitioning a Sample with BinaryType Questions in Lieu of Collecting Observations

The Value of and Demand for Information
Higher Education as a Filter

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About the author (1984)

A past president of the American Economic Association, Kenneth J. Arrow was awarded the Nobel Memorial Prize in Economic Science in 1972.