Download Information Technology and Markets for Information

Information Technology and
Markets for Information
Jon Zinman
Dartmouth College
January 8, 2010
How Might IT Transform
Decisions, Markets, Outcomes?
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Consumer side
Producer side
Watchdog side
Market level
• Challenges
• Next steps
How Might IT Transform
Consumer Decisions, Outcomes?
• Reducing search/shopping costs
– U.S. lit on this
– Anything from LDCs?
Consumer Side: Priming
• “Priming” may become more cost-effective
– Motivating example: baseline survey
increases later demand for related investment
behaviors (Zwane et al)
– A subtle “nudge”
– Do priming on larger scale with text
messages?
Consumer Side: Reminders
• “Reminders” may be cost effective
– Example: Karlan et al (2010): text reminders increase savings
• Many unanswered questions remain
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Increase overall savings, financial health?
Any perverse effects (e.g., borrowing to increase consumption)?
Work for other healthy behaviors?
Optimal timing, frequency, duration
• E.g., do people “tune out” at some point?
– Optimal content
• Reminders and/or feedback on goal tracking
– Strong defaults on these features?
– How much customization optimal for consumer?
Consumer Side: Goals & Plans
• Reminders worked well on sample of people
who had set goals, make plans
• Can IT improve outreach on goal-setting, making
effective plans (then sticking)?
• Probably yes, where computers and smart
phones are prevalent
• Key here: testing the marketing and content of
streamlined, fun decision aids
– Trying to get this going with software startup in USA
– Information vs. information overload
– Goals vs. plans
How Might IT Transform
Producer Decisions, Outcomes?
• Reduce search costs for market (e.g.,
price) information
– Svensson and Yanagizawa (2009): Uganda
farmers
• Zitzewitz and Zinman (2009): iPhone app
dramatically reduces deceptive advertising
by ski resorts
How Might IT Transform
What Watchdogs (Can) Do?
• Burstyn and Coffman (2009) text message
reports to parents on kids’ school
attendance
• IPA: how can we use IT to audit human
service NGOs more efficiently (partner =
Global Giving)
How Might IT Transform
Market Outcomes?
• Jensen (2007): access to price info via
mobile phones increase fish market
efficiency
– Reduced waste
– Reduced price dispersion (also Aker 2008)
Challenges and Next Steps
• R&D has really high value here
– Very practical applications
– Very weak body of evidence on what works, doesn’t
and why
• Wrinkle: “bad guys” not passive participants here
– E.g., investments in obfuscation by firms who seek to
deceive customers (Ellison and Ellison)
• By my sense is that IT levels the playing field a
bit by reducing the importance of fixed costs
Consumer Side: Impulse Saving
• Automating healthy behaviors
– Probably most relevant for financial behavior, and
where people have checking accounts
• E.g., use mobile banking to make easy:
– One-time setup of automated transfers from checking
to savings
– On-the-go transfers: “impulse saving”
• Well-timed feedback/reminders probably key here
• Use strong defaults here
– Measuring the right outcomes key