11
Economics of
Information
•Information is not a normal good in the
economic sense, and basic economic laws of supply and demand
work differently in the information world:
–Dependence on a medium
–High fixed costs, low reproduction
costs (easy and cheap to copy)
–Non-rival and non-excludable =
“public good”
–High price elasticity of demand
–Time dependent
–Barriers to entry
•This results in failed
attempts at government commercialisation.