Perhaps the most powerful form of asymmetric information is missing from JP Rangaswami’s post addressing whether the web is making us dumber. I agree with the core point of JP’s article, but I think he oversimplifies the argument on asymmetry in a way that misses something important about the power of information.
JP defines four types of informational asymmetry, which he argues is key for information to have power:
Asymmetry-by-access — You can get it, they can’t.
Asymmetry-in-creation — You create it, you can control access or have unique benefit from it.
Asymmetry-in-education — The information may be symmetrically available, but only “experts” can make effective use of it.This could also be called asymmetry-by-capability: the capability to utilize information more effectively than others.
Asymmetry-by-design — Take abundant information and design a system to create scarcity. For example, the iPhone (or Android) app store as the only – (or dominant) way to get new apps on your phone.
JP goes on to argue that
This approach, asymmetry-by-creation, and its alter ego, asymmetry-by-design, are about creating artificial scarcity. This is fundamentally doomed. I’ve said it many times. Every artificial scarcity will be met by an equal and opposite artificial abundance.
With all due respect, I must politely disagree. At first, I thought it was a flaw in the argument about asymmetry, but then I realized it was perhaps because I was considering a fifth asymmetry that simply didn’t fit JP’s mold.
Asymmetry-by-choice – The information is shared with mutual agreement by all parties to respect certain limits, typically requested by the discloser, although often required by regulators. This asymmetry is typically bootstrapped from asymmetry-by-creation and maintained as asymmetry-by-access.
One example: I tell my therapist things because I know they won’t get revealed. The therapist agrees to keep that information in confidence because she knows that if she doesn’t, I won’t reveal it. After the fact, she keeps her promise because she knows that the ethical, legal, and financial consequences aren’t worth breaking it. This is a good thing.
A second example: non-disclosure agreements (NDAs). A receiving party agrees to respect the rights in confidential information in order to better understand the disclosing party’s business. Normally, the discloser wouldn’t be comfortable disclosing certain information, but that would prevent the parties from pursuing mutually beneficial business interests. Only with assurances by the receiving party is the disclosing party comfortable revealing information that ultimately, may be vital to forging a more sustainable, more meaningful, and more profitable relationship. The NDA allows the two parties to continue the conversation with a certain level of expectation about subsequent use of the disclosed information. This is a good thing.
These types of voluntary acceptance of asymmetry in information are the fabric of relationships. We trust people with sensitive information when we believe they will respect our privacy.
I don’t see abundance undoing that. Either the untrustworthy recipient develops a reputation for indescretion and is cut off, or the entire system would have to preclude any privacy at all. In that latter scenario, it would become impossible to share our thoughts and ideas, our dreams and passions, without divulging it to the world. We would stop sharing and shut down those thoughts altogether rather than allow ourselves to become vulnerable to passing strangers and the powers that be. Such a world of totalitarian omniscience would be unbearable and unsustainable. Human beings need to be able to trust one another. Friends need to be able to talk to friends without broadcasting to the world. Otherwise, we are just cogs in a vast social order over which we have almost no control.
Asymmetry-by-choice, whether formalized in an NDA, regulated by law, or just understood between close friends, is part of the weft and weave of modern society.
The power of asymmetry-by-choice is the power of relationships. When we can trust someone else with our secrets, we gain. When we can’t, we are limited to just whatever we can do with that information in isolation.
This is a core part of what we are doing with VRM and the ISWG. Vendor Relationship Management (VRM) is about helping users get the most out of their relationships with vendors. And those relationships depend on Vendors respecting the directives of their customers, especially around asymmetric information. The Information Sharing Work Group (ISWG) is developing scenarios and legal agreements that enable individuals to share information with service providers on their own terms. The notion of a personal data store is predicated on providing privileged information to service providers, dynamically, with full assurance and the backing of the law. The receiving service providers can then provide enhanced, customized services based on the content of that data store… and individuals can rest assured that law abiding service providers will respect the terms they’ve requested.
I think the value of this asymmetry-by-choice is about artificial scarcity, in that it is constructed through voluntary agreement rather than the mechanics/electronics of the situation, but it is also about voluntary relationships, and that is why it is so powerful and essential.