New Balance in the Model of Information Economy

Abstract

Purpose

The purpose of the work is to verify the offered hypothesis and to develop a new model of macro-economic balance, adapted to peculiarities of information economy.

Methodology

The methodology of the research is based on equilibrium approach to studying socio-economic phenomena and processes. According to this approach, in order to determine the balance in information economy, the methods of abstracting and modeling of economic systems are used. The theoretical basis of the chapter is the classical macro-economic balance in “AD–AS” model (aggregate demand–aggregate supply model).

Results

The research concluded that information economy envisages high specificity of the main commodity market – market of information as a product – and that behavior of sellers and buyers cannot be described correctly with the help of the classical two-dimensional model of demand and offer in macro-economics. In order to solve this problem, the author presents a new three-dimensional model of balance, which is adapted to peculiarities of information economy. This model shows that the aggregate demand and supply of information as a product in information economy depends not only on the level of market price for information but also on its value and preservation of its uniqueness. So apart from striving for lowest prices, consumers are interested in purchasing the most valuable information, which is not sold by sellers and is not available in the market. The market has only information that has no critical value for its owners and economy on the whole.

Recommendations

The author’s three-dimensional model of balance, adapted to peculiarities of information economy, is recommended for application.

Citation

Dubova, Y.I. (2018), "New Balance in the Model of Information Economy", Sukhodolov, A.P., Popkova, E.G. and Litvinova, T.N. (Ed.) Models of Modern Information Economy, Emerald Publishing Limited, Leeds, pp. 171-181. https://doi.org/10.1108/978-1-78756-287-520181018