Information wants to be expensive, not free

From Dieter Zinnbauer’s Information Wants to Be Expensive, Not Free! And this is Bad for Justice, Democracy, the Economy (Mar. 1, 2018):

This essay is rather speculative. I argue that there is a very much overlooked characteristic of information goods, particularly digital information goods – that leads to a substantive, yet rarely discussed market failure with far-reaching consequences for important classes of information related to our education and research system, the judiciary, markets and democracy at large.

This overlooked feature is the positionality of many information goods. Positionality means that the utility of a specific information item for user x depends on the level of consumption of the same item by other users. Specific types of information are more valuable (or at times only valuable), when they are very exclusively available only to a small band of users. Or more intuitively, the fewer other people have a specific piece of information at a given point in time, the more valuable it may be to me.

Surprisingly, this simple characteristic is rarely discussed in the information literature or perhaps seems just too obvious to merit deeper analysis. Yet, as I will try to show, the positionality of information has far-reaching implications for the functioning of information markets and for the actual incentive systems of different players that all too often seem to be mis-construed as overly pro-social. And putting a focus on positionality also highlights the relevance and urgency for revisiting related regulatory policies, in order to ponder possible corrective interventions to tackle the ensuing informational imbalances and exclusive practices that positionality-oriented pricing structures for such information will generate.

Recommended. — Joe

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