The value of information

The cause of conflicts of interest is undoubtedly the information asymmetry. as people tend to hide the information they have control of from others. This is very common and sometimes information asymmetry tightly relates with privacy as if there is no existence of information asymmetry, the privacy will also vanish. However, in the market, we can see in some cases, control of particular information is used as money or exchange medium, as one party in the market can give up some of their individually controlled information to another party in order to bargain for better services or products. For example, when people are surfing the Internet, they tend to share their search history with their websites in order to get faster or more relevant feedback from the websites they use, for example, they tell news websites what they are more interested at, and the news websites put the information they are interested on the top of the pages and also use the information collected from their users to create extra values, such as allowing advertising. Back to the problem of conflicts of interest, as we see that to get more information needs to give away equivalent values, then if companies want to get more information from their workers, they can either buy from a third party to monitor their workers or buy information directly from their workers. Transfers of information is a trade.

Hence, we can see that information definitely has its value, can be used to buy extra utilities. However, there is a problem in determining the value of information. The use of information is like many goods that they have different levels of utility in the hands of different people. Therefore, it cannot be an exchange medium as money that has a commonly agreed value. Moreover, different types of information have different values, and same types of information about different individuals also have different values. It is always more valuable information costs more to collect. People can know news about celebrities from newspaper, it seems so easy to collect information about them; however, the costs of collecting information from celebrities is a lot more expensive than collecting information from an ordinary people, since the profits of getting the gossip of celebrities are higher than the costs, it makes people feel knowing information from celebrities is easy and not so expensive.

Therefore, if companies want to know their employees' information about their performances and attitudes, they have to spend awful a lot on collecting such information, and the benefits from knowing the information could be lower than the costs, under such circumstance, there is no incentive for companies to collect the issue of conflicts of interest, though it can create a lot more social costs (e.g. financial crisis).