ABSTRACT
A small group at the London School of Economics has been studying the economics of information from both a theoretical and a practical point of view. Possible and existing roles in information can be classified in a number of ways, but there are four important ones. First, governments are producers, disseminators, and consumers of enormous quantities of information. Second, governments may intervene through taxing or subsidizing some or all of the activities—production, dissemination, or consumption of information. Third, governments may introduce regulations of various kinds, generally aimed either at protecting competition or at limiting competition. Fourth, governments may wish to try to influence decision making by various participants in the information markets-producers, disseminators, or consumers. The government can certainly do a very good job in carrying out and supporting research and development regarding information, possibly because of the high risk levels attached to this work.
