Structured Atypical Sets and Information Economics

This note proposes a broader interpretation of informational inefficiency in economics. Standard information economics studies hidden actions, hidden types, and incomplete markets. In these models, inefficiency emerges because agents cannot observe or contract upon relevant variables. The present note suggests that many economically important informational problems may instead arise from structured atypical subsets of the state space. Such subsets may possess low probability while producing large effects on welfare, stability, or institutional behavior. Under this interpretation, asymmetric information becomes one instance of a more general problem concerning the uneven distribution of informational structure across economic systems.