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Market Signals as Powerful Purveyors of Information
In Friedrich Durrenmatt's play "The Visit of the Old Lady",
Claire Zachanassian, old and immensely rich, returns to her home
town of Güllen and shocks citizens of this sleazy place with an
unsavory offer. She publicly promises a bounty of one billion to be
divided among the town's treasury and its citizens under the
condition that Alfred Ill dies. Alfred was her early love, but he
let her down when she became pregnant, and Claire finally left
Güllen. Now, after surviving eight rich husbands, the old lady exacts her revenge ...
Information world
The father of the World Wide Web worries about his creation.
Sir Tim Berners Lee is worried about the spread of cult thinking over the web.
When Cern, where he did his pioneering work on the web, turned on the
Large Hadron Collider LHC in September 2008,
fears about a black hole swallowing the Earth quickly spread over the internet.
Other internet rumours hold that some harmless vaccines are dangerous to children.
Sir Tim considers the introduction of labels for trustworthiness of websites.
Information Economics treats important aspects of such labels.
Chapter 6 discusses the economics of the supply of quality labels like credit ratings,
Chapter 10 shows how misleading information can spread even among relatively rational individuals.
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