1985 Articles

Information and Economic Analysis: A Perspective

Stiglitz, Joseph E.

The article focuses on information and economic analysis. Traditional economic analysis was predicated on three maxims: nature abhorred discontinuities, nature abhorred non-convexities and the Law of Supply and Demand. During the 1970s, a large number of models examining economic behavior in the presence of imperfect information have been constructed. Adam Smith's invisible hand has attracted more attention than any other. It has the notion that a competitive equilibrium would attain a Pareto efficient allocation.