The Information Techonology Revolution and the Scarcity of Time

ABSTRACT

The explosive growth in recent years of the amount of information and leisure time has greatly facilitated and stimulated information acquisition. In spite of such advantageous circumstances however, individuals seem to be remaining defensive and conservative in terms of time and money spent on the use and acquisition of information. These seemingly contradictory phenomena can be explained as a "scarcity of time" for individuals.

In other words, several factors lie behind this situation. (1) In order for an individual to consume a piece of information and reproduce it in a more useful form, a certain amount of time must be invested, and this time is scarce. (2) Unlike an organization, which can allocate time input among its members, an individual is not able to invest time in this way, and is limited in their capacity for intertemporal time distribution. (3) Organizations can benefit from pooling information, which is a non-rival good, while and individual cannot. (4) Individuals must be risk averse and conservative in spending money for information acquisition purposes, because information so acquired needs time to be assimilated and digested.

The inevitable scarcity of time for individuals-and the resultant conservative attitude toward information acquisition-can explain various phenomena, including the following: (1) sales prices of personal computers, books, CDs, etc. on the Internet vary widely and are not necessarily cheaper than their sticker prices; (2) the consumer goods industry seems to show a direct correlation between performance and advertising/PR strategies aimed at monopolizing the attention of consumers; (3) most of the recently reported large mergers occurred in the consumer goods and service industries, which target the household sector.

Of the above, (1) has been considered a paradox, yet in actuality it is merely the result of rational behaviors on the part of individuals, as a result of the scarcity of time. Furthermore, (2) and (3) suggest a possibility that companies could formulate corporate strategies for the monopolization of the attention of customers, which is itself a scarce resource. However, such behaviors-which are quite rational for individuals and companies-may lead to inefficiencies for society as a whole. Consequently, as a result of the scarcity of time, the supposition that the IT revolution will eventually solve the asymmetry of information and bring about a nearly perfect market does not hold.

Eliminating inefficiencies resulting from the insufficient acquisition of information is no easy task. In order to build a social system in which widespread proficiency in information retrieval cancels tendencies toward the monopolization of consumer acquisition, it may be useful to search for ways to utilize NPOs and to reduce personal responsibilities in information providing. In competition law, too, business may have reached a stage in which the monopoly of products or production factors should be discussed alongside the "monopoly of attention", a monopoly against which it is very difficult to protect consumers' rights.

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