Economics 1021A/B Quiz: Network Economy Basics

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: bruce hammond

Document Summary

The economists of information technology (shapiro & varian, 2004) Information is costly to produce (fix costs) but cheap or free to reproduce ( first copy costs"; low variable costs) the higher the fix costs are, the lower are the marginal costs there are no capacity limits for additional copies. Konsument cost based pricing calculation is not meaningful (if the unit costs are zero) Managing intellectual property legal framework exists, but proper reinforcement is still problematic the industry reacts conservative and not innovative (customers should be win, not threatened) Gema gets additional costs per medium by success, which passed to the artists, authors etc. Many artists increasingly make money out of concerts and merchandize instead of selling music itself, because e. g. concerts can"t be re-produced ( event management") Search good: material (e. g. in the supermarket) Experience good: pay for unknown (e. g. music, cinemas, books)