The value of (not) knowing

We pay for goods and services, but are we also prepared to pay to know something — or indeed to not know something?

The economy is mostly concerned with the trading of goods and services — that is what people and businesses buy and sell. But there is something else that is sometimes also bought and sold: information. In many cases, information (or knowledge, a term generally used for information with meaning) can be valuable because it can lead to material gain. It is a means to an end.

A hotel chain may well be willing to pay good money for a report on the hospitality industry, that interprets market data and sets out the trends in demand and supply. Sure, this payment compensates the work the company that conducted the research did and the glossy paper copy, but the value is entirely in the end result: the knowledge embedded in the report.

Not so new

The idea that information is a meaningful concept in economic thinking is not new. George Stigler, who would be awarded the Nobel prize in 1982, wrote a seminal article in 1961, “The Economics of Information”. It deplores the relative neglect ‘information’ had been suffering in his field at the time, and expands on two specific examples where information has demonstrable economic value…