Abstract
The information asymmetries arising as a result of the recent developments in information technologies have grown consistently over time. The dominant position of business enterprises such as Google and Facebook has led to a duopoly in the provision of online information, as reported by the Financial Times (Garrahan, 2017; on the monopolistic element inherent to the information industry see Schneier (2014) and Starr (2019)). The combination of a duopolistic information supply with the cognitive and time constraints exhibited by consumers composing the demand side of the economic system results in a decision framework where preferences and decisions themselves can be extrapolated and modified by online suppliers (Kosinski et al., 2013).
While the main tendency among current economists consists of praising the innovations introduced through artificial intelligence and machine learning in the information technology sector as the results of a convergence process towards perfect information (Varian et al., 2004; Tabarrok and Cowen, 2015; Milgrom and Tadelis 2018), the reality described by other disciplines diverges considerably from such an idyllic view (Epstein and Robertson, 2015). A vast amount of evidence provided by, among others, psychologists (Pariser, 2012; Izuma and Adolphs, 2013) and computer scientists (Lanier, 2014; Schneier, 2014; Auerbach, 2015), emphasizes the ability of information technology companies to select strategically the information provided to market participants so as to modify and redirect the preferences of decision makers.
Markets cannot therefore be understood and studied as abstract self-correcting entities driven by supply and demand interactions, since information suppliers are endowed with sufficient power to determine to a large extent the results from these very own interactions (Schneier, 2014; Mirowski and Nik-Khah, 2017). The consequences from these asymmetries regarding misinformation and doubt manufacture have spread to a plethora of scientific domains (Michaels, 2008; Mirowski, 2011), extending well beyond the economic discipline into the open systems view that incorporates the short and long-run consequences of business decisions for human health and environmental sustainability (Kapp, 1963).
Institutional economists have concerned themselves with these developments since the early foundational stages of the critical theory of social costs (Veblen, 1904; Kapp, 1950) and extended its main findings into the markets driven by current business-biased information technology innovations (Frigato and Santos-Arteaga, 2019). Given the ingenuity exhibited by institutional economists to incorporate the findings from different academic disciplines into their interdisciplinary analysis of the pecuniary institutions of capitalism (business enterprises and market interactions), the main objective of the current volume is to foster the development of such implications further.
We welcome original manuscripts dealing with the information asymmetries inherent to the behavior and evolution of current market structures and their economic, social, political, and ecological implications.