Crowding Out Wasteful Activities by Wasteful Activities

Amihai Glazer

No 80908, Working Papers from University of California-Irvine, Department of Economics

Abstract: A 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.

Keywords: Information; Rent seeking (search for similar items in EconPapers)
JEL-codes: D61 D82 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta
Date: 2008-09
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Persistent link: http://EconPapers.repec.org/RePEc:irv:wpaper:080908

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