{"id":1455,"slug":"stigler-1961-economics-of-information-price-dispersion","title":"Stigler 1961 — \"The Economics of Information\"; costly search produces price dispersion (JPE 69:213-225)","kind":"reference","scope":"business","status":"current","audiences":["kevin","smb-owner","candid-team"],"topics":["pricing","behavioral-economics","information-asymmetry"],"reference_body":"**Claim.** Information is a costly economic good; the cost of search produces a distribution of prices in the market rather than a single posted price. The agent that lowers its information cost captures the surplus the disperser leaves.\n\n**Quote.**\n> \"Market equilibrium will be characterized not by a single price but rather by a distribution of prices… whose variance is related to the cost of searching.\"\n\n**Source.** George J. Stigler, \"The Economics of Information,\" *Journal of Political Economy* 69(3): 213-225 (1961). PDF: uchicago.edu (accessed 2026-06-21). ~3,580+ citations (Semantic Scholar, accessed 2026-06-21).\n\n**Confidence.** Verified. Academic, no incentive taint. Foundational paper in information economics.\n\n**Caveats.** Pre-internet framing; modern search costs have collapsed for buyers but not symmetrically for sellers — re-read in 2026 as a thesis about *firm* information access more than consumer search.\n\n**Implication / use.** Grounds the pricing decision domain: a firm that can *see* market price dispersion and its own margins captures surplus that the disperser leaves on the table. This is the cleanest non-commercial foundation for the pricing-edge story.","rationale_body":null,"metadata":null,"links":{"outgoing":[{"slug":"research-brief-information-asymmetry-decision-edge-june-2026","title":"Research notes (capture-layer): the affirmative, inward decision-edge case for data intelligence — information asymmetry applied to pricing, demand, risk, retention, targeting (June 2026)","kind":"research-notes","scope":"business","link_type":"depends-on"}],"incoming":[{"slug":"rule-information-edge-is-counterparty-disadvantage","title":"Rule: treat an information advantage as the counterparty's information disadvantage — that is the source of the edge","kind":"rule","scope":"business","link_type":"depends-on"},{"slug":"akerlof-1970-market-for-lemons-asymmetric-information","title":"Akerlof 1970 — \"The Market for Lemons\"; asymmetric information can collapse markets (Nobel 2001)","kind":"reference","scope":"business","link_type":"relates-to"}]},"created_at":"2026-06-21T01:14:48.665Z","updated_at":"2026-06-21T01:14:48.665Z"}