One of the basic principle of the traditional economic model has blown up and it is the perfect news for all the economic operators: consumers, investors, workers and entrepreneurs. Actually, this has always been a weakness in economism. Thanks to Internet this issue is on the front burner. Everybody believed that Internet would provide us with all the necessary economic information, creating a situation of “friction-free capitalism”.
Joseph Stiglitz, Nobel Prize for Economics in 2001, wrote << for over a hundred years the economy has created models that are thought to deliver perfect information. Of course everybody acknowledges that information is incomplete: but everybody hoped that the economies with less perfect information would look more like the economic models with perfect information. One of the main results of my research was to demonstrate that it is not true: the slightly imperfection in the information could cause a deep effect on economic stability>>.
In the 18th and 19th centuries economists were aware of how unrealistic the idea of perfect information was delivered by the economic actors. But the economy of the twentieth century has completely ignored that information distortions affect the fundamental conditions of the data analysis. They needed clear mathematic models: information imperfections were affecting data analysis, therefore they decided not to take them into consideration.
Joseph Stiglitz wrote <
Many have claimed that, thanks to Internet, it was time for all information to be equally delivered, notably because the cost of publishing and finding information has dropped dramatically. Bill Gates has introduced the concept of “friction-free capitalism”, which means cheaper transactions and more perfect information. But the web has created even more new asymmetries, not only for digital divide, that is the increasing distance between people connected to internet and those who, for economic reasons cannot access the web. Interned has created the so-called information overload: an unbearable massive bombardment of information. A bombardment that favours some people more than others .
Herbert Simon, Nobel Prize for Economics in 1978, psychologist, used to say <
This situation blows the neoclassical model up: the neoclassical model moves from an assumption that is true only if it is perfectly false and, as it cannot always be true, it is always false. But if the market is always imperfect, the legislation claimed by the economist model are not valid anymore. With no external interventions, the resources are inefficiently, unfairly and unequally distributed by the market.
The economic discipline is not self-sufficient. In order to understand economy, culture and social structure become important in economic analysis. The same applies to information which, in our era, correspond to the web.