Monday, November 03, 2008

Pricing of information

An interesting piece of research from one of my professors from INSEAD, Markus Christen: it seems that it is more profitable for information providers to offer lower quality information to their clients. This will force their clients to use multiple providers to arrive at a 'truth', and will also allow them to raise the prices of the (unreliable) information they offer. This works if there is a low correlation between the information offered by the providers, and if there is a relatively low number of providers.
Reminds me of IDG, Gartner, et al. Which incidentally are among the examples mentioned in the paper.