Industrial vs. Information Age

#	Industrial Age	Information Age
	Adversarial relationship	Cooperative relationship
	Bureaucratic organizations	Team organization
	Autocratic leadership	Shared leadership
	Centralized conrol	Autonomy with accountability
	Autocracy	Democracy
	Representative democracy	Participative democracy
	Compliance	Initiative
	One-way communication	Networking
	Compartmentalization	Holism
	Division of labour	Integration of tasks
	Practices	Principles
	Outside In	Inside Out
	Scarcity	Abundance
	Control	Unleash
	Manage Things	Lead People
	Motivation is external	Motivation is intrinsic

3. What are the main global challenges of the Information Age?

4. Comment the following statements: ‘channelizing and controlling the dissemination of information becomes more and more difficult’, ‘a global uniform digital law will become a necessity in future’.

5. Why is everyone under the threat of information theft and misuse?

6. Give a description of the main social challenges of the Information Age.

7.
What is information revolution? The figure below will be helpful.

Fig. 1.10 Role of Information Revolution

8. Discuss the following problem: “A different but relevant social challenge in the Information age will be the right deployment of human capital.”

9. Why are technological challenges so important?

10. Summarize the text.

Text 8

Hidden-Information Agency

By Bernard Caillaud,

Benjamin E. Hermalin [8]

Introduction

Our purpose is to consider the problem of hidden information; that is, a game between two economic actors, one of whom possesses mutually relevant information that the other does not. This is a common situation: The classic example being the “game” between a monopolist, who doesn’t know the consumer’s willingness to pay, and the consumer, who obviously does. Within the realm of contract theory, relevant situations include a seller who is better informed than a buyer about the cost of producing a specific good; an employee who alone knows the difficulty of completing a task for his employer; a divisional manager who can conceal information about his division’s investment opportunities from headquarters; and a leader with better information than her followers about the value of pursuing a given course of action. In each of these situations, having private information gives the player possessing it a potential strategic advantage in his dealings with the other player. For example, consider a seller who has better information about his costs than his buyer. By behaving as if he had high costs, the seller can seek to induce the buyer to pay him more than she would if she knew he had low costs. That is, he has an incentive to use his superior knowledge to capture an “information rent.” Of course, the buyer is information rent aware of this possibility; so, if she has the right to propose the contract between them, she will propose a contract that works to reduce this information rent. Indeed, how the contract proposer—the principal—designs contracts to mitigate the informational disadvantage she faces will be a major focus of this reading.