What are information costs?

Information costs are how much it takes to find out what you need to know, like looking for a toy in a big playroom.

Imagine you're playing hide and seek. If your friend hides right behind the couch, it doesn’t take long to find them. But if they’re hiding under the bed in the other room, you have to search harder, that’s more information cost.

Think about looking for your favorite snack in a big pantry. If it's on the top shelf where you always put it, you don’t need to look long. But if it’s buried under cereal boxes and cookies, you have to dig through everything, that takes more time and effort.

When grown-ups use information, like looking up prices or directions, they also pay information costs. If the information is easy to find, like a sign pointing to the park, it doesn’t cost much. But if they have to read through a long list of rules or search online for hours, that’s more work, and more information cost.

So, information costs are just how hard or easy it is to get the answers you need! Information costs are how much it takes to find out what you need to know, like looking for a toy in a big playroom.

Imagine you're playing hide and seek. If your friend hides right behind the couch, it doesn’t take long to find them. But if they’re hiding under the bed in the other room, you have to search harder, that’s more information cost.