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The production and allocation of information as a good that is enhanced with increased use

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  • Kubiszewski, Ida
  • Farley, Joshua
  • Costanza, Robert
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    Abstract

    Information has some unique characteristics. Unlike most other goods and services, it is neither rival (use by one prevents use by others) nor non-rival (use by one does not affect use by others), but is enhanced with increased use, or 'additive'. Therefore a unique allocation system for both the production and consumption of information is needed. Under the current market-based allocation system, production of information is often limited through the exclusive rights produced by patents and copyrights. This limits scientists' ability to share and build on each other's knowledge. We break the problem down into three separate questions: (1) do markets generate the type of information most important for modern society? (2) are markets the most appropriate institution for producing that information? and (3) once information is produced, are markets the most effective way of maximizing the social value of that information? We conclude that systematic market failures make it unlikely that markets will generate the most important types of information, while the unique characteristics of information reduce the cost-effectiveness of markets in generating information and in maximizing its social value. We then discuss alternative methods that do not have these shortcomings, and that would lead to greater overall economic efficiency, social justice and ecological sustainability. These methods include monetary prizes, publicly funded research from which the produced information is released into the public domain, and status driven incentive structures like those in academia and the "open-source" community.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2010)
    Issue (Month): 6 (April)
    Pages: 1344-1354

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    Handle: RePEc:eee:ecolec:v:69:y:2010:i:6:p:1344-1354

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    Web page: http://www.elsevier.com/locate/ecolecon

    Related research

    Keywords: Information Knowledge Anti-rival Patents Copyrights Market failure Allocation Intellectual property rights;

    References

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    1. Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
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    4. Nancy Gallini & Suzanne Scotchmer, 2002. "Intellectual Property: When Is It the Best Incentive System?," NBER Chapters, in: Innovation Policy and the Economy, Volume 2, pages 51-78 National Bureau of Economic Research, Inc.
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    7. Suzanne Scotchmer, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter.
    8. Joseph E. Stiglitz, 2002. "Information and the Change in the Paradigm in Economics," American Economic Review, American Economic Association, vol. 92(3), pages 460-501, June.
    9. Walter G. Park & Douglas C. Lippoldt, 2008. "Technology Transfer and the Economic Implications of the Strengthening of Intellectual Property Rights in Developing Countries," OECD Trade Policy Papers 62, OECD Publishing.
    10. Kubiszewski, Ida & Cleveland, Cutler J. & Endres, Peter K., 2010. "Meta-analysis of net energy return for wind power systems," Renewable Energy, Elsevier, vol. 35(1), pages 218-225.
    11. Fiona E. Murray & Scott Stern, 2007. "Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge?: An Empirical Test of the Anti-Commons Hypothesis," NBER Chapters, in: Academic Science and Entrepreneurship: Dual Engines of Growth National Bureau of Economic Research, Inc.
    12. Weber, Steven, 2000. "The Political Economy of Open Source Software," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt3hq916dc, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
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