Abstract

Information economics represents a fundamental change in the prevailing paradigm within economics. The argument of Adam Smith (1776) that free markets lead to efficient outcomes has played a central role in these debates: It suggested that we could, by and large, rely on markets without government intervention (or, at most, with a limited role for the government). The set of ideas that I will present here undermined Adam Smith's theory and the view of the role of government that rested on it. The ideas and models I will discuss here have proved useful not only in addressing broad philosophical questions, such as the appropriate role of the state, but also in analyzing concrete policy issues.

Citation

Stiglitz, Joseph. "Information and the Change in the Paradigm in Economics (Les Prix Nobels)." In Les Prix Nobel: The Nobel Prizes 2001. Ed. Tore Frangsmyr. Stockholm, Sweden: The Nobel Foundation, 2001.

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