“What of the social value of the sure informaton…? Suppose that by a collective payment to some knowledgeable outsider, an entire community consisting of the representative individuals above could all simultaneously be informed as to which future state will obtain – how large a payment would be justified? The answer is: NONE.”

—Hirshleifer, J. (1971). The private and social value of information and the reward to inventive activity, American Economic Review 61, 561-574.

Hirshleifer assumes a perfect, economical man, so the social value of information goes to zero when it’s given to everyone. But it flies in the face of common sense and experience. Therefore, implicit in that scenario is the question: what accounts for the variations among men that disprove the circumstances he describes and discredits, just a little, homo economicus?

It’s a special moment in the literature: kind of like he almost didn’t believe what he was writing.

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