problems that may arise from information asymmetry
agent problems
agents do not always act for the best interests of their clients. For example, as the agent of all shareholders, the manager may not always safeguard the interests of shareholders, and try to maximize his own interests when making decisions. In the principal-agent relationship, due to information asymmetry, the contract between shareholders and managers is not complete, and it needs to rely on the "moral self-discipline" of managers. The goals pursued by shareholders and managers are inconsistent. Shareholders want to maximize the value of their shares, while managers want to maximize their own utility. Therefore, there is moral hazard between shareholders and managers, and it is necessary to guide and limit managers' behavior through incentive and restraint mechanisms. This is also the principle of equity incentive.
moral hazard problem
after the transaction is completed, the information asymmetry will make both parties face the problem of moral hazard. Moral hazard is a problem raised when studying insurance contracts. Economists often use moral hazard to summarize people's "laziness", "hitchhiking" and opportunistic behaviors. In the governance of listed companies, there are usually three situations: first, violating the loan agreement and changing the use of funds without permission; Second, the borrower conceals the investment income and evades the repayment obligation; Third, the borrower is indifferent, irresponsible and does not work hard to the benefit of the use of borrowed funds, resulting in the loss of borrowed funds.
adverse selection
asymmetric information may lead to adverse selection.
This phenomenon was first proposed by Kenneth Joseph Arrow in 1963. George Akerlof of of akerlof published his famous book "Lemon Market" in 197s, which was further elaborated. Three American economists, akerlof, spence and Stiglitz, won the 21 Nobel Prize in Economics for their research achievements in asymmetric information market and information economics.
from an economic point of view, it means that one party to a transaction does not fully understand the other party, and the two parties are in an unequal position.
Brief introduction of information asymmetry theory
Information asymmetry theory refers to the fact that in the market economy activities, all kinds of people have different understanding of relevant information; People with adequate information are often in a favorable position, while those with poor information are in a unfavorable position. The theory of information asymmetry was put forward by three American economists-joseph stiglitz, George Akerlof and Michael spence. The theory holds that: the seller in the market knows more about all kinds of information about goods than the buyer; The party with more information can benefit from the market by transmitting reliable information to the party with poor information; One of the buyers and sellers who has less information will try to get information from the other; Market signal display can make up for the problem of information asymmetry to some extent; Information asymmetry is the drawback of market economy. In order to reduce the harm of information asymmetry to economy, * * * should play a powerful role in the market system. This theory provides explanations for many market phenomena, such as the ups and downs of the stock market, employment and unemployment, credit rationing, commodity promotion, and market possession of commodities, and has become the core of modern information economics, and has been widely used in various fields, from traditional agricultural products markets to modern financial markets.
classification of economic knowledge
Hayek has divided knowledge into two categories in the article "The Use of Knowledge in Society": one is scientific knowledge, that is, organized knowledge is mastered by experts and can be obtained in theories and books; One is the knowledge of a specific time and place, which is owned by people at that time and place. Here, Hayek's knowledge is actually information, so we can also divide them into two categories as far as economic information is concerned.
different kinds of information have different positions and functions in the economic system. As information, economic theory is a summary of regularity in economic phenomena and a general trend or state, which is often used to describe macro-economy and micro-economy abstractly. Knowledge at a specific time and place is unique information that everyone can use, and it is the root of information asymmetry. Only when each individual makes a decision based on this information or actively participates in it can this information be used.
However, in all kinds of economic management, these two kinds of information are often confused. Sometimes economic theory is used as knowledge at a specific time and place, and sometimes the knowledge at a specific time and place is used as economic theory, which misallocates social resources and even affects the efficiency of economic implementation. This situation exists in both the management of macro-economic system by the state and the management of micro-economic system by enterprises.
Hayek listed the important role of knowledge at a specific time and place in his article: for example, a person who makes a living by transporting goods in the air or in the half-air of an indefinite futures boat, or a real estate broker whose knowledge almost lies in knowing an instant opportunity, or an arbitrage person who benefits from the price difference of goods in different places, all of whom play an important role in society with their special understanding of fleeting situations unknown to others. It is also pointed out that in economic management, this important information is easily despised by managers, resulting in losses or increased transaction costs. It is a dangerous tendency for managers to indulge in implementing policies with statistics and ignore the constant small changes in the economic system. Because the task of keeping costs from rising in any competitive industry requires unremitting efforts, this task alone will consume a lot of energy. Although the statistical total shows greater stability than the movement of specific details, the relative stability of such statistics cannot be explained by the "law of large numbers", that is, the mutual compensation of random changes, as statisticians often want to do.
information confusion in centralized procurement activities. Compared with decentralized procurement, centralized procurement based on redistribution can't save money as managers think, and sometimes it wastes resources. Here is a real example: a provincial branch of a bank made a centralized purchase of accounting vouchers and various registers under its jurisdiction to save money. First, each secondary branch reported the vouchers and register consumption for one year, and the provincial branch made statistics, and then invited tenders for production, which was distributed to each secondary branch by the printing factory. According to statistics, it saves a lot of money, so this form will be encouraged by managers to implement it again. People can get the advantage of transaction price by gathering scattered transactions together and completing them at one time. This is a conclusion based on scientific knowledge, that is, the theory of economies of scale in economics, and we can't deny its correctness. However, after careful investigation and analysis, the facts are not as true as statistics, and many things that happened at a specific time and place have changed all this. First, there was a problem when reporting the types and quantities of use. There was no historical data, so we had to rely on subjective guesses. The key was not to pay for it ourselves. Therefore, in line with the principle of "Better than more, don't lack", many vouchers and registers that were not needed were also reported, but a lot of them were reported. At present, a large number of rarely used vouchers and registers are piled up in the warehouses of various banks. Second, there are problems in the use. The printing factory can't supply them in time when they need them, which affects the development of the business. Some banks can't supply the business charge vouchers, and they haven't sent them after several calls, so there is no charge. Third, the printing factory did not print according to the requirements, and printed the triple bill into two copies. Every time the customer fills in the triple, it will inevitably occupy one of the two copies, which is not only unsatisfactory, but also wastes one copy, which means that one copy can only be used for half purposes. In addition, many register books are designed to be extremely large. Originally, 3 lines can be printed on one page, but 2 lines are printed, which wastes a lot of space. I think the printing house understands the truth best. It is estimated that the losses caused by the above situation cannot be compensated by the cost saved by centralized procurement. I didn't think of it at the beginning of centralized procurement, just because managers confused the role of expert information with information at a specific time and place. Almost all transactions are completed by information at a specific time and place, so it is often wrong to replace the knowledge at a specific time with the knowledge of experts. Economists have a systematic knowledge of economics, but it is not necessarily the best to do arbitrage trading in the stock market, because stock speculation is completed by information at a specific time.
Spencer-Morris condition confuses different kinds of information. Michael Spencer studied the signal transmission in the labor market, put forward the Spencer-Morris condition, linked people's ability with their academic qualifications, and concluded that academic qualifications can show a person's ability. He believes that an individual with strong ability can get a diploma at a lower cost, while a person with low ability can get a diploma at a higher cost.
the direct consequence of this theory is that all units now require highly educated personnel in recruitment, forming a blind pursuit of highly educated talents. Under the encouragement of this system, people pursue higher education at any cost, which greatly reduces the supply of education, and various forms of educational institutions have mushroomed. Educated people can create more social value than uneducated people, and education level is directly proportional to ability, which is a universal law, just as large-scale procurement can reduce unit cost. However, according to Hayek's classification of information, the information provided by education is scientific knowledge and summarized information, and the ability in practical work is mainly reflected in the ability to grasp and process information at a specific time and place. Confusing the ability to grasp educational information with the ability to grasp information at a specific time will also cause problems in concrete practice. For example, in reality, repetition and purchase can also enable people with different abilities to obtain the same academic qualifications. In addition, students' efforts at school are different, and there are many people who are mixed. Students with undergraduate degrees have different abilities in different schools. The tendency of only academic qualifications and the phenomenon of false academic qualifications and false diplomas. As an indicator of education level, academic qualifications show individual ability, which is the result of system choice in most cases, rather than the result of free market choice.
information distribution
in the modern economic system, information has become an important economic resource, which has become a necessary means of production like capital and land and has been brought into the national economic accounting as an industry. In the previous economic system, the proportion of information industry was very small, and it was basically provided by the state as a state organ. Its cost was included in the national budget, and its income was counted as the progress of social civilization, so it was not included in the usual national economic accounting. However, as a resource, information has been playing a role in the distribution of social wealth, and it runs through the whole history of human society.
according to Hayek's classification of knowledge, knowledge is divided into scientific knowledge and knowledge at a specific time and place. Below I will analyze the distribution of these two types of knowledge. As a social resource, scientific knowledge has been monopolized and rationed by the state for a long time, and the efficiency of resource allocation is low. Education is a major tool for the distribution of scientific knowledge. The implementation of state rationing in education is manifested in the monopoly and mastery of information distribution tools such as schools by the state. It is not difficult to draw the above conclusions by examining the history of education in various countries. The monopoly of scientific knowledge limits the supply of scientific knowledge and information, so that most members of society have no chance to receive education, and education has become the patent of a few upper-class societies. The supply of information resources has been in a serious shortage relative to the demand, which has hindered the civilized process of human society to a great extent. In history, ignorance caused by people's lack of scientific knowledge has cost society too much. Now, China has liberalized private education, which has eased the contradiction between supply and demand of scientific knowledge to a certain extent. Information, like electricity and transportation, plays an important fundamental role in the development of national economy. However, the state-led information dissemination, that is, the allocation of information resources, is very inefficient and has become the bottleneck of social and economic development. Therefore, the socialization and marketization of information resource allocation will be an inevitable trend. This is also the case for the distribution of information at a specific time and place. The media can be regarded as a major tool for the allocation of information at a specific time and place, such as broadcasting, telecommunications, newspapers, etc. The media operated by * * * also has the problem of inefficient allocation of information resources, mainly manifested in the non-market operation of information allocation, non-commercialization of information, and inability to meet the demand for information in economic activities. Under the condition of market economy, economic activities demand more and more information at a specific time and place. It will be an inevitable trend to let go of the restrictions on the subject of information resource allocation, allow private capital to operate the media, establish an information dissemination mechanism led by market individuals, and allocate social information resources according to the rules of market economy.
the information distribution determines the information asymmetry, which is one of the main sources of information asymmetry. Most of the existing information asymmetry is the result of institutional choice rather than the reason of institutional choice, so the solution to information asymmetry should first focus on the information distribution system. The information industry can be divided into education, scientific research and cultural industries that allocate scientific knowledge, and broadcasting, telecommunications and media industries that allocate information at a specific time and place, including the Internet. It can also be divided into tool industry of information resources allocation and content industry of information resources. Together, they form an economic system for allocating information resources. The significance of information economics is to study the efficiency of this system and how to improve the efficiency to be optimal.
economic system of information resource allocation
information resource is a scarce resource like other social wealth. Priority possession of information resources will also bring related wealth. When a certain information resource is monopolized, the corresponding interests will also be monopolized. Patent right is a kind of monopoly of information resources. The monopoly of Intel's chips, a kind of scientific and technological resources, makes it calmly at the top of the pyramid of electronic computer industry, and its value accounts for nearly half of the whole computer industry chain. When a country's economy plays an important role in the world, its language will also become a scarce resource, such as English, and non-English-speaking countries around the world spend huge wealth to master this language every year. Advanced civilization itself is a valuable resource, and backward areas have to spend money to buy it, such as Hollywood movies.
Now people divide the economic system into three parts: logistics, capital flow and information flow. At present, economics has less systematic analysis on the relationship and influence of these three blocks, which can also be regarded as a new classification method for social industries, and may become the mainstream of research on social industries in the future. The current industrial classification is to divide industries into the primary industry, the secondary industry and the tertiary industry, and it has become the main means to study the economic system and national economic accounting. The impact of applying the new industrial classification method on the economic system, the allocation efficiency of economic resources and the impact on economic policies is very worthy of in-depth study by economics.
Information has been disseminated in a certain way since its formation. We call the tools, contents and methods of information dissemination the economic system of information resource allocation. This economic system can