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The Elgar Companion to the Economics of Property Rights

The Elgar Companion to the Economics of Property Rights

Elgar original reference

Edited by Enrico Colombatto

Economics is a matter of choice and growth, of interaction and exchange among individuals. Because property rights define the rules of these interactions and the objects of exchange, it is vital to fully understand the institutions and implications of the various property-rights regimes. With over 20 original and specially commissioned chapters, this book takes the reader from the historical and moral foundations of the discipline to the frontiers of scholarly research in the field.

Chapter 20: Property Rights in the Digital Space

Eric Brousseau

Subjects: economics and finance, public choice theory, public sector economics, politics and public policy, public choice


Eric Brousseau* Internet, a global and integrated information space Digital technologies overwhelm the economics of information, knowledge and networks. First, they increase the fixed-costs nature of these resources, turning them into less rival goods than before (Shapiro and Varian 1999). Second, the digital codification of information allows the separation of the management of containers from the management of contents, leading to ‘universal’ platforms able to manage any kind of information independent of its nature (whether it is information, codified or tacit knowledge), its form (voice, image, data and so on), or its semantics (whatever ‘language’ is used to establish links between things, concepts and form of perceptible expression). When compatible technical solutions are implemented across groups of users, the platform becomes global. It enables any agent to transmit any information to any third party or to access contents. Third, the rules that govern the use of information can be implemented in the software that manages the hardware. This provides the opportunity to implement self-enforcing rules about the possible use of the technology and the information (Lessig 1999). Of course, none of these characteristics is perfect in the digital world. Variable costs are not equal to zero. Technical standards are competing and imperfect. Hackers constantly break codes. Moreover, these characteristics do not free economic agents of all constraints. Solutions have to be implemented to cover fixed costs and to stimulate agents to contribute to the production of public goods. Coordination mechanisms have to (be) develop(ed) to ensure the...

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