Information, the internet and competitive equilibrium
We analyse the consequences of an increase of information (say as a consequence of the internet), on the equilibrium of a pure exchange economy with n goods and m agents. We assume that such an increase modifies the characteristics of goods la Lancaster and has a positive effect on utility. We show that in equilibrium an increase of information increases a linear combination of the utilities of the agents. The different possibilities of gains and losses are explicitly analysed in an example with two goods and two agents.
|Date of creation:||00 Dec 2001|
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