Information Disclosure and the Economics of Science and Technology

Economists understand technology less deeply than some might hope. But they understand the world of technology far better than they do the world of science (see, for example, Rosenberg, 1982, especially chapter 7). Kenneth Arrow’s famous 1962 essay, and the literature it inspired, is in good part to blame for this state of affairs. In ‘Economic Welfare and the Allocation of Resources for Inventions’, Arrow laid the foundations for modern economic analysis of research and development (R&D) activities. On that base, a large, and impressive edifice of research devoted to the economics of technological invention and innovation has since been erected. By absolute as well as comparative standards, the economics of science has remained lamentably underdeveloped. That too is traceable to the 1962 essay.