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Summary Business of Media Notes Week 6
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Friday, 16 October 2020BOM WEEK 6 NOTES
BOM
Benkler - Some Basic
Economics of Information
Production and Innovation
- Nevertheless, scientists working at noncommercial research institutes funded by
nonprofit educational institutions and government grants produce most of our basic
science.
- The technical economic answer is that certain characteristics of information and culture
lead us to understand them as "public goods," rather than as "pure private goods" or
standard "economic goods."
- If you nonetheless want to eat an apple, more resources (trees, labor) need to be diverted
from, say, building chairs, to growing apples, to satisfy you.
- Information is nonrival.
- The physical paper for the book or journal costs something, but the information itself
need only be created once. Economists call such goods "public" because a market will
not produce them if priced at their marginal cost - zero.
- From the perspective of a society's overall welfare, the most efficient thing would be for
those who possess information to give it away for free - or rather, for the cost of
communicating it and no more. On any given day, enforcing copyright law leads to
inefficient underutilization of copyrighted information. However, looking at the problem of
information production over time, the standard defense of exclusive rights like copyright
expects firms and people not to produce if they know that their products will be available
for anyone to take for free.
- Over time, this incentive effect will give us more innovation and creativity, which will
outweigh the inefficiency at any given moment caused by selling the information at above
its marginal cost
- If any new information good or innovation builds on existing information, then
strengthening intellectual property rights increases the prices that those who invest in
producing information today must pay to those who did so yesterday, in addition to
increasing the rewards an information producer can get tomorrow
- Increasing patent protection, both in developing nations that are net importers of existing
technology and science, and in developed nations that already have a degree of patent
protection, and therefore some nontrivial protection for inventors, increases the costs that
current innovators have to pay on existing knowledge more than it increases their ability
to appropriate the value of their own contributions.
- No daily newspaper would survive if it depended for its business on waiting until a
competitor came out with an edition, then copied the stories, and reproduced them in a
competing edition. Daily newspapers earn their revenue from a combination of low-priced
newsstand sales or subscriptions together with advertising revenues
- It is safe to say that daily newspapers are not a copyright-dependent industry, although
they are clearly a market-based information production industry.
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