How Technology and Innovation Drive Global Development

In this exclusive interview, we talk to Dr. Sam Pitroda, adviser to the Prime Minister of India on Public Information Infrastructure and Innovation with the Rank of Cabinet Minister. Dr. Pitroda takes us on a very personal journey on India’s technology driven revolution looking at areas ranging from the impact of the phone, through to the sweeping changes in economics, social-structure and even national security.

http://thoughteconomics.blogspot.com/2010/12/how-technology-and-innovation-drive.html

The Moral Hazard of Asymmetric Information

Regardless of whether one agrees with the rationale behind Wikileaks‘ release of thousands of diplomatic cables, one certainty is that their appearance has opened a necessary debate on moral hazard’s in our own democracy.

Manifesting Moral Hazard

Information Asymmetry is an important concept, usually noted in transactional situations, where one party has more (or better) information than another- creating an imbalance of power (or influence) in a transaction- affecting the outcome.  “Moral Hazard” is a particular type of information asymmetry which deals (predominantly) with risk.  A Moral Hazard occurs “…if a party that is insulated from risk has more information about its actions and intentions than the party paying for the negative consequences of the risk“.  We first explored this looking at “The Moral Hazard of Short Term Attitudes” in financial markets, but in day-to-day life you could draw paradigm from an individual who takes less care over a hire-car because any negative consequences of a crash are the responsibility of the hire company (and its insurers). Continue reading

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