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The Strategic Potential of Information Imperfections: An Information Strategy Framework for Seeking InfoRent

Onno Truijens
University of Amsterdam, The Netherlands
Ard Huizing
University of Amsterdam, The Netherlands


Abstract
Information imperfections, and asymmetrical information in particular, have primarily been regarded as impediments to the economic efficiency of markets; they have seldom been explored as opportunities to earn economic rents. This article builds an information strategy framework by elaborating on the strategic opportunities that exist for firms in markets that fail to satisfy the perfect information condition of neoclassical economic theory. We propose ‘InfoRent’ as a new economic rent type that results from exploiting the inherent opportunities of incomplete and asymmetrical information and introduce a fundamental difference in information strategy decisions: firms can either resolve or consolidate instances of information imperfections in markets. These generic information strategy decisions are then synthesized into four theoretical propositions on InfoRent-earning possibilities for firms. Finally, these propositions are tentatively tested through a sector study that examines the Dutch leisure travel industry through the lens of the information strategy of one of the key players in this industry, tour operator TravelCom.

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Reference:Truijens, O., Huizing, A. (2005). "The Strategic Potential of Information Imperfections: An Information Strategy Framework for Seeking InfoRent," University of Amsterdam, Netherlands . Sprouts: Working Papers on Information Systems, 5(5). http://sprouts.aisnet.org/5-5
Keywords:infoRent, information imperfection, information strategy, market transparency
Item Type:Article - Volume 5 Article 5 (2005)
Language:English
Email: Onno Truijens (o.truijens@uva.nl)
Ard Huizing (a.huizing@uva.nl)
Related Link(s):http://primavera.feb.uva.nl/scripts/abstract.php?id=204

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