Can the Conventional Models Apply? The Microeconomics of The
Information Revolution
Bruce Don and Dave Frelinger
RAND
Abstract
Operating with incorrect assumptions concerning information firms and
how they conduct commerce has significant public policy implications.
One possible consequence is inappropriate anti-trust action (or
inaction) by government regulators. Because the decision to enforce
is essentially Boolean in nature and can have long-term impacts on the
industry, it is important to base regulatory and other public policy
decisions on appropriate models. This paper argues that there are
importantly different microeconomic paradigms applicable to
information-based commerce. These differences should be investigated
in some depth to inform future policy decisions affecting
information-based enterprises and economies based on their commerce.
Such research may lead to significant improvements in our ability to
make good public policy decisions on issues that will challenge us as
our society adapts to the changes in commerce brought about by
information technology.
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