Abstract

Earlier experimental evidence indicates that many decision makers under-invest in information when it is costly. This insight is applied to the cost-benefit analysis of the provision of data obtained by satellites. In fields like agriculture remotely sensed information of great precision can be provided to additional farmers at minimal extra costs if a service for farmers with similar information needs is set up. Here, the tendency to under-invest in information asks for creative solutions by the private sector: bankers may work together with rational producers in setting up the information service and promoting it. However, if producers' financial resources are insufficient public intervention in the form of a free information service may be necessary.

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