CONF: Economics of Digital Information and Intellectual

Alexander Chislenko (
Thu, 26 Sep 1996 17:21:57 -0400

John F. Kennedy School of Government
Center for Science and International Affairs
and Center for Business and Government

Harvard Law School
Institute for Information Technology Law and Policy
Harvard University Library
Council on Library Resources
Coalition for Networked Information

The Economics of Digital Information and Intellectual Property

Cambridge, Massachusetts, USA

January 23-25, 1997

First Announcement and Call for Papers

Harvard University is hosting this symposium to broaden and deepen
understanding of emerging economic and business models for
global publishing and information access and the attendant
transformation of international information markets, institutions, and
businesses. The goal is to provide managers in public, private, and
nonprofit sectors with a practical framework for developing
program strategies and assessing the efficiency and competitiveness of
new information markets and institutions. It will address
questions such as:

--What will be the principal pricing models for information in an
advanced global Internet?

-- How will pricing models be affected by different technological
factors and market environments?

-- What will be the relationships between classic production costs,
transaction costs, and the economic value of intellectual

-- How will different pricing practices at lower layers affect the
pricing of information?

-- What are likely long-term trends and scenarios for different pricing
models? What will be the effect of bundling or unbundling of
information services?

-- How will changing cost structures change the allocation of rights
between authors and publishers and other intermediaries?

-- How will markets for complementary products and services affect the
pricing and use of information?

-- What are the policy implications of different pricing models?

-- How do these reflect policy values associated with different kinds of


The rapid growth of the Internet and the World Wide Web is trans-
forming the way information is accessed and used in business,
education, and the home. New models for distributing, sharing, linking,
and enhancing information are appearing, often embodied in
software or infrastructure. No change is more dramatic than the shift to
user-initiated retrieval for text-based information
formerly distributed in the form of physical objects by
publisher-initiated manufacturing and delivery. A similar shift may be
underway for sound and video. However, the considerable differences in
bandwidth and storage requirements between text,
images, sound, and video may dictate different cost and pricing models
in the near and mid-term. As production and distribution
costs decline, transaction costs and the value of intellectual property
may assume greater prominence. On the other hand,
standards and software may work to substantially reduce transaction
costs over the long run. With barriers to entry reduced by
technology, information markets may become extremely competitive,
reducing margins and possibly lowering the economic value
of many forms of intellectual property.

The Internet and the World Wide Web are characterized by explosion of
information along with an explosion of new tools for
navigating information. Competition for attention intensifies as
companies extend their marketing, sales, and support functions into
the Internet. Useful or entertaining information may have greater value
in attracting customer attention in an increasingly
competitive marketplace for information. Accordingly, it has been argued
that information will be valued less as intellectual
property and more in terms of the access it provides to other markets
and the value it adds to relationships. As a practical
matter, copyright may be overshadowed by the growing use of contracts as
a means of both securing value and defining
expectations in continuing relationships. Positions in simple
distribution chains are likely to erode as a result of disintermediation
and intense competition. In particular, reduced production costs and the
desire to avoid residual transaction costs may force
vendors away from complex pricing models. For example, usage-based
pricing may give way to subscription pricing. Such
dynamics may lead to new institutional arrangements for managing
life-cycle costs of information, especially in small markets
where users are also producers.

Similarly, as production costs decrease, the costs of information may be
assimilated by the underlying infrastructure or assumed
by users. This trend may be seen in the pricing of online services and
in the massive volunteering of content on the World Wide
Web. The Web, including software and servers, enables editorial and
navigation functions traditionally performed by publishers and
libraries to be performed in increased measure by individual authors and
end users. Cost analysis in this environment may hinge on
identification and evaluation of critical bottlenecks -- with the
understanding that many technological limitations may be
short-lived. Congestion may lead to new methods of supplementing
point-to-point transmissions, such as caching, mirroring, and
satellite broadcast. These new mechanisms may raise intellectual
property and interconnection questions that may be addressed
both as business and policy issues. Congestion may also hasten the
implementation of type of service priority at either the network
or server levels. Negotiation over quality and scope of service may
become extremely complex, and vendors may be tempted to
price to as many dimensions of value as possible. However, simple
pricing models may have surprisingly strong appeal, as they
have had in the analog environment. Sequential distribution windows for
motion pictures illustrate the potential for simple price
differentiation in a technologically complex environment. Price
differentiation is now playing an increasingly important role in the
marketing of software and databases. In fact, there may be public policy
arguments for price differentiation, not only for reasons
of efficiency but to enable some of level of access for those who cannot
afford access under standard terms, just as public
libraries have offered access for those who could not afford to buy.


The Information Infrastructure Project emphasizes communication and
sharing of insight among scholars and practitioners with
different skills and backgrounds. Papers should be written in a clear,
non-technical manner (technical appendices may be
permitted) for a mixed, interdisciplinary audience that will include
publishers, librarians, economists, lawyers, and policy-

Prospective authors should submit short abstracts for review and comment
as soon as possible. Extended abstracts or outlines
should be submitted by October 15, 1996, to ensure consideration for the
program. Acceptances of abstracts and outlines are
conditional pending receipt of a satisfactory draft by December 15,
1996. Papers and supplementary material will be published as
a volume in the Project's series with the MIT Press. Copyright
assignment is not required, and parallel publication of individual
papers in journals is encouraged.

Please send paper proposals and requests for subsequent announcements

Or send mail to:

Tim Leshan
Information Infrastructure Project
John F. Kennedy School of Government
79 John F. Kennedy St.
Cambridge, MA 02138
Fax: 617-495-5776

Alexander Chislenko <>
Firefly Network, Inc.: <> 617-234-5452