DP16459 Information Markets and Nonmarkets
|Author(s):||Dirk Bergemann, Marco Ottaviani|
|Publication Date:||August 2021|
|Keyword(s):||data, data intermediaries, Information, information markets, Information Nonmarkets, Science|
|JEL(s):||D82, D83, D84, G14, L86|
|Programme Areas:||Industrial Organization, Organizational Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16459|
As large amounts of data become available and can be communicated more easily and processed more effectively, information has come to play a central role for economic activity and welfare in our age. This essay overviews contributions to the industrial organization of information markets and nonmarkets, while attempting to maintain a balance between foundational frameworks and more recent developments. We start by reviewing mechanism-design approaches to modeling the trade of information. We then cover ratings, predictions, and recommender systems. We turn to forecasting contests, prediction markets, and other institutions designed for collecting and aggregating information from decentralized participants. Finally, we discuss science as a prototypical information nonmarket with participants who interact in a non-anonymous way to produce and disseminate information. We aim to make the reader familiar with the central notions and insights in this burgeoning literature and also point to some open critical questions that future research will have to address.