Saturday, October 11, 2008
Can there be too much information?
In class, we discussed indicative planning and how one example of a market failure is imperfect information. Indicative planning was a way to remove this imperfect information. So, economists believe that more information is beneficial to the market economy, because it helps people make more informed decisions. However, the article Too Much News? makes the argument that there can be too much information. Currently, a lot of people are spending a great deal of their time reading the news and keeping track of the current state of things, due to the economic crisis, and the article claims that this leads to a decrease in productivity. I think there is some truth to this. If people are reading about the stock market all the time, they're going to be constantly changing their portfolios in reaction to the news, which is just going to make the stock market more unstable than it already is.
Subscribe to:
Post Comments (Atom)
2 comments:
The article also points out that the information overload is due to technology changes and new products. These things make it easier for us to check for changes in the news. I can see how spending too much time on keeping yourself updated can cause a decrease in productivity.
I agree with Mark and the article that advancements in technology and easy access to information can lead to a decline in personal productivity. I think that has been an issue for awhile, but it has intensified because this is such an eventful time to live in. Probably after Nov. 4, the need to be up to date on everything will decrease somewhat since many of the people in the article said they were tracking the elections.
I found your point about too much information and stock markets interesting. It's true that the time difference between receiving information and acting on it has been reduced to almost nothing, and that can potentially destabilize the stock market. Also, with more access to information comes more access to imperfect information, especially if it comes from the Internet. Anyone can post anything on the net, and if they are convincing enough, people may read it and choose to act on it, even if it isn't credible information.
Post a Comment