Trading facts: Arrow's fundamental paradox and the emergence of global news networks, 1750-1900
AbstractThe nineteenth century saw the advent of news agencies that became well-coordinated global organisations with large networks of correspondents, such as Reuters, Havas, Wolff-Continental and Associated Press. Essential features of these agencies were substantial fixed and sunk set-up costs, high fixed operating costs, a marginal cost of supplying news to an additional customer of virtually zero, and the quasi-public good character of information, which had implications for the organisational form, marketing and pricing. To solve Arrow’s fundamental paradox of information, agencies adopted subscriptions, because this made the marginal price of news zero. The news networks were operated by unique organisations whose evolution interacted with new technologies. The paper investigates how the news agencies emerged, whether and how they co-evoluted with infrastructure firms, what business models they pioneered, how they developed/discovered these models, and how they became encapsulated in an oligopolistic industry structure in the course of the nineteenth century.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, Department of Economic History in its series Economic History Working Papers with number 22519.
Length: 36 pages
Date of creation: Jun 2007
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- B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
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- Field, Alexander J., 1987. "Modern Business Enterprise as a Capital-Saving Innovation," The Journal of Economic History, Cambridge University Press, vol. 47(02), pages 473-485, June.
- Gerben Bakker, 2014. "Soft power: the media industries in Britain since 1870," Economic History Working Papers 56333, London School of Economics and Political Science, Department of Economic History.
- Gerben Bakker, 2012. "Sunk costs and the dynamics of creative industries," Economic History Working Papers 49081, London School of Economics and Political Science, Department of Economic History.
- Gerben Bakker, 2012. "Adopting the rights-based model: music multinationals and local music industries since 1945," Economic History Working Papers 47507, London School of Economics and Political Science, Department of Economic History.
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