The Open Cybernetics & Systemics Journal

2015, 9 : 992-995
Published online 2015 August 31. DOI: 10.2174/1874110X01509010992
Publisher ID: TOCSJ-9-992

Analysis of the Impact of Information Standardization on the Improvement of Market Efficiency

Zhihui Feng , Feiqi Deng , Yuhui Zhang , Xuan Luo and Wei Wang
South China Universiy of China, Wushan RD., Tianhe District, Guangzhou, China.

ABSTRACT

Based on the case of China’s timber market, the paper analyses the impact of information standardization on the improvement of market efficiency. Information standardization can week the extent of asymmetric information, reduce the information costs in trade, and hence enlarge the market scale. Our microeconomic model shows that, if there is uncertainty in the market demand and market supply, the trader’s loss due to the unbalance of the market will be reduced as the market scale increasing. Therefore, information standardization will benefit the traders from scale economy.

Keywords:

Information standardization, market scale, trade efficiency.