Crowding Out Wasteful Activities by Wasteful Activities
AbstractA seller can benefit from information about the valuation a potential buyer places on the good. Under some circumstances, improved information raises social welfare. But under other circumstances, the information has private value but no social value, so that agents may spend too much on collecting information. A government which collects and disseminates some information about valuations can limit spending by private agents on data collection, thereby increasing social welfare. That is, governmental provision of information may be useful not because information is socially useful, but because it limits the amount private agents spend on collecting information.
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Bibliographic InfoPaper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 080908.
Length: 12 pages
Date of creation: Sep 2008
Date of revision:
Information; Rent seeking;
Find related papers by JEL classification:
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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