The Importance of Information Problem in Financial Markets

The Importance of Information Problem in Financial Markets

DEMİRCİ, Nedret
SANCAK, Ercan

Information can be considered just as an economic good, because it has a price in the market like every economic product and to produce and disperse it is costly. Also it allows individuals to make choices that yield higher expected payoffs or expected utility than they would obtain from choices made in the absence of information. Information has some other special characteristics than other economic values. It is easy to create but hard to trust. It is easy to spread but hard to control. It influences many decisions. These special characteristics (as compared with other types of goods) complicate many standard economic theories and make sense on the financial markets. The goal of this paper is to emphasize on what information means generally in economics and especially in financial markets and to evaluate the economic problems in a detailed manner when ―imperfect information‖ is available in the financial markets.

Conference or Workshop Item
PeerReviewed

2010-06

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