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Consider a network game of local provision of public good [4] when agent's actions are strategic substitutes, (i.e. the benefit of the individual from undertaking a certain action is not greater if his partners undertake the same action) thus, in the case of strategic substitutes, equilibrium actions are non-increasing in player's degrees.
Information economics or the economics of information is the branch of microeconomics that studies how information and information systems affect an economy and economic decisions. [ 1 ] One application considers information embodied in certain types of commodities that are "expensive to produce but cheap to reproduce."
A variety of factors can lead to missing markets: A classic example of a missing market is the case of an externality like pollution, where decision makers are not responsible for some of the consequences of their actions.
In economics and game theory, complete information is an economic situation or game in which knowledge about other market participants or players is available to all participants. The utility functions (including risk aversion), payoffs, strategies and "types" of players are thus common knowledge .
In the mathematical subjects of information theory and decision theory, Blackwell's informativeness theorem is an important result related to the ranking of information structures, or experiments. It states that there is an equivalence between three possible rankings of information structures: one based in expected utility , one based in ...
The economics of information has recently become of great interest to many - possibly due to the rise of information-based companies inside the technology industry. [9] From a game theory approach, the usual constraints that agents have complete information can be loosened to further examine the consequences of having incomplete information.
One early commercial application of information theory was in the field of seismic oil exploration. Work in this field made it possible to strip off and separate the unwanted noise from the desired seismic signal. Information theory and digital signal processing offer a major improvement of resolution and image clarity over previous analog methods.
The Review of Economic Studies, 4(59), 777-793. JSTOR 2297997; Schmitz, P.W. (2001). The Hold-Up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory. Bulletin of Economic Research, 1(53), 1-17. Schmitz, P.W. (2006). Information Gathering, Transaction Costs, and the Property Rights Approach.