How does information technology affect economic decision making?
It improves the avaialbility and quality of information on which decisions can be taken. Even more important, it democratises th availability of information. Because of IT, for example, I as an individual can get almost as much info about what’s going on in the stockmarket as the professionals. Similarly, if a decision taker needs to brief themselves about, for example, the market for hosiery in India, they can get a good deal of info through the Web and won’t need to visit, or even talk to people in, India unless some really cost-important decision has to be taken based on getting it right. Another thing is that information can easily be shared within a business. A third truth is that real-time, or near-real-time innfo is available when it can be. In all cases the main effect is, or at least should be, that decisions are taken on a better-informed basis, and markets move closer to the economists’ ideal of “perfect competition”.
