The Ignorance Economy
Imagine finding a place to stay in a city, say Bangalore. You know what you are looking for, you have your specifications. A place that allows bachelors (Good luck with that!), within your budget, with basic amenities like wifi, may be a parking spot for your dysfunctional bike. You know such places exist, you just don't know where, and how to find it. A few years ago, you would have found a house broker and have extensive negotiations. He will show you a couple of shoddy houses to bring down your expectations and drive up his utility. Finally you will most likely settle for a place within your parameters and pay the brokerage. Lets deep-dive into what happened here. The brokers job was just connecting you to an opportunity that already existed. You are paying for your ignorance. This was a simple, if inefficient example. You might think, that don't all payments fall under ignorance costs then? Imagine you take an Uber or Ola, then you pay for convenience, not ignoranc