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	<title>Chapter 2, section 2 - Revision history</title>
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	<updated>2026-09-21T11:19:38Z</updated>
	<subtitle>Revision history for this page on the wiki</subtitle>
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	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=3428&amp;oldid=prev</id>
		<title>Ptj: revert</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=3428&amp;oldid=prev"/>
		<updated>2007-08-18T01:24:37Z</updated>

		<summary type="html">&lt;p&gt;revert&lt;/p&gt;
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				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;← Older revision&lt;/td&gt;
				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;Revision as of 01:24, 18 August 2007&lt;/td&gt;
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&lt;/table&gt;</summary>
		<author><name>Ptj</name></author>
	</entry>
	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=3406&amp;oldid=prev</id>
		<title>Xb4Nbm at 00:21, 18 August 2007</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=3406&amp;oldid=prev"/>
		<updated>2007-08-18T00:21:59Z</updated>

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				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;← Older revision&lt;/td&gt;
				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;Revision as of 00:21, 18 August 2007&lt;/td&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;tr valign=&amp;quot;top&amp;quot;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;tr valign=&amp;quot;top&amp;quot;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;/table&gt;</summary>
		<author><name>Xb4Nbm</name></author>
	</entry>
	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=3162&amp;oldid=prev</id>
		<title>Ptj: revert</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=3162&amp;oldid=prev"/>
		<updated>2007-08-13T15:39:54Z</updated>

		<summary type="html">&lt;p&gt;revert&lt;/p&gt;
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				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;← Older revision&lt;/td&gt;
				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;Revision as of 15:39, 13 August 2007&lt;/td&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[http://benevolently.freehostia.com/content/view/doppler/ doppler] [http://mauballe.125mb.com/web/navigatore-altimetro/ navigatore altimetro] [http://grahrens.125mb.com/view/new/selen-nuda/ selen nuda gratis] [http://selemku.t35.com/text/directory/abiti-gala.htm abiti gala] [http://www.freewebtown.com/prncessprncipe/library/html/lotta-in.htm lotta in ring] [http://zoelverd.freeweb7.com/description/lib/sotto-il/ sotto il segno del pericolo] [http://oedi.freehostia.com/text/directory/acer-palmare/ acer palmare navigatore gps] [http://licohwar.homeblock.com/library/html/gemmes/ gemmes] [http://coarmago.t35.com/content/view/quando-partivano/ quando partivano i lenti il bagatto] [http://beshennayabelka.freehostia.com/content/view/spurgo.htm spurgo] [http://oedi.freehostia.com/text/directory/incontrare-donna/ incontrare donna russa] [http://grahrens.125mb.com/view/new/evolution-soccer/ evolution soccer] [http://flheddin.125mb.com/content/view/televisori-.htm televisori 32 pollici crt] [http://wainfan.t35.com/view/new/chat-erotica.htm chat erotica annunci] [http://oedi.freehostia.com/text/directory/lucio-dalla/ lucio dalla luce dei miei occhi] [http://getm0ney.freewebpage.org/lib/type-of/ type of famme] [http://lorcaxon.homeblock.com/data/listino-automobile/ listino automobile] [http://selemku.t35.com/text/directory/brocca-e.htm brocca e catino] [http://licohwar.homeblock.com/library/html/www-mappe/ www mappe] [http://kopapguw.homeblock.com/topic/lavoro-riva/ lavoro riva del garda] [http://www.freewebtown.com/prncessprncipe/library/html/abiti-armani.htm abiti armani donna] [http://getraylo.freeweb7.com/img/styles/messanger-download.htm messanger download] [http://kopapguw.homeblock.com/topic/cerco-travestito/ cerco travestito] [http://selemku.t35.com/text/directory/lg-.htm lg - 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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;tr valign=&amp;quot;top&amp;quot;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;tr valign=&amp;quot;top&amp;quot;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;/table&gt;</summary>
		<author><name>Ptj</name></author>
	</entry>
	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=2983&amp;oldid=prev</id>
		<title>Xb4Nbm at 22:03, 11 August 2007</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=2983&amp;oldid=prev"/>
		<updated>2007-08-11T22:03:41Z</updated>

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				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;Revision as of 22:03, 11 August 2007&lt;/td&gt;
				&lt;/tr&gt;&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-lineno&quot; id=&quot;mw-diff-left-l1&quot;&gt;Line 1:&lt;/td&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;tr valign=&amp;quot;top&amp;quot;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;tr valign=&amp;quot;top&amp;quot;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;td&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;td&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;</summary>
		<author><name>Xb4Nbm</name></author>
	</entry>
	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=2104&amp;oldid=prev</id>
		<title>Grandpa Ruh: restored page</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=2104&amp;oldid=prev"/>
		<updated>2006-07-02T17:08:43Z</updated>

		<summary type="html">&lt;p&gt;restored page&lt;/p&gt;
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				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;← Older revision&lt;/td&gt;
				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;Revision as of 17:08, 2 July 2006&lt;/td&gt;
				&lt;/tr&gt;&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-lineno&quot; id=&quot;mw-diff-left-l1&quot;&gt;Line 1:&lt;/td&gt;
&lt;td colspan=&quot;2&quot; class=&quot;diff-lineno&quot;&gt;Line 1:&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;div id&lt;/del&gt;=&quot;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;nolabel&lt;/del&gt;&quot; &lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;style&lt;/del&gt;=&quot;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;overflow&lt;/del&gt;:&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;auto;height&lt;/del&gt;:&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;1px;&quot;&amp;gt;&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;table width&lt;/ins&gt;=&quot;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;650&lt;/ins&gt;&quot;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;&amp;gt;&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;SEO: UndoneHeaven&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;=== Introduction ===&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Software Development, custom software development, offshore  software development, outsourcing software development&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;/&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;div&lt;/del&gt;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Once we recognize that there are diverse strategies of appropriation for information production, we come to see a new source of inefficiency caused by strong &quot;intellectual property&quot;-type rights. Recall that in the mainstream analysis, exclusive rights always cause static inefficiency - that is, they allow producers to charge positive prices for products (information) that have a zero marginal cost. Exclusive rights have a more ambiguous effect dynamically. They raise the expected returns from information production, and thereby are thought to induce investment in information production and innovation. However, they also increase the costs of information inputs. If existing innovations are more likely covered by patent, then current producers will more likely have to pay for innovations or uses that in the past would have been available freely from the public domain. Whether, overall, any given regulatory change that increases the scope of exclusive rights improves or undermines new innovation therefore depends on whether, given the level of appropriability that preceded it, it increased input costs more or less than it increased the prospect of being paid for one&#039;s outputs.&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;The diversity of appropriation strategies adds one more kink to this story. Consider the following very simple hypothetical. Imagine an industry that produces &quot;infowidgets.&quot; There are ten firms in the business. Two of them are infowidget publishers on the Romantic Maximizer model. They produce infowidgets as finished goods, and sell them based on patent. Six firms produce infowidgets on supply-side (Know-How) or demand-side (Scholarly Lawyer) effects: they make their Realwidgets or Servicewidgets more efficient or desirable to consumers, respectively. Two firms are nonprofit infowidget producers that exist on a fixed, philanthropically endowed income. Each firm produces five infowidgets, for a total market supply of fifty. Now imagine a change in law that increases exclusivity. Assume that this is a change in law that, absent diversity of appropriation, would be considered efficient. Say it increases input costs by 10 percent and appropriability by 20 percent, for a net expected gain of 10 percent. The two infowidget publishers would each see a 10 percent net gain, and let us assume that this would cause each to increase its efforts by 10 percent and produce 10 percent more infowidgets. Looking at these two firms alone, the change in law caused an increase from ten infowidgets to eleven - a gain for the policy change. Looking at the market as a whole, however, eight firms see an increase of 10 percent in costs, and no gain in appropriability. This is because none of these firms actually relies on exclusive rights to appropriate its product&#039;s value. If, commensurate with our assumption for the publishers, we assume that this results in a decline in effort and productivity of 10 percent for the eight firms, we would see these firms decline from forty infowidgets to thirty-six, and total market production would decline from fifty infowidgets to forty-seven.&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Another kind of effect for the change in law may be to persuade some of the firms to shift strategies or to consolidate. Imagine, for example, that most of the inputs required by the two publishers were owned by the other infowidget publisher. If the two firms merged into one Mickey, each could use the outputs of the other at its marginal cost - zero - instead of at its exclusive-rights market price. The increase in exclusive rights would then not affect the merged firm&#039;s costs, only the costs of outside firms that would have to buy the merged firm&#039;s outputs from the market. Given this dynamic, strong exclusive rights drive concentration of inventory owners. We see this very clearly in the increasing sizes of inventory-based firms like Disney. Moreover, the increased appropriability in the exclusive-rights market will likely shift some firms at the margin of the nonproprietary business models to adopt proprietary business models. This, in turn, will increase the amount of information available only from proprietary sources. The feedback effect will further accelerate the rise in information input costs, increasing the gains from shifting to a proprietary strategy and to consolidating larger inventories with new production.&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Given diverse strategies, the primary unambiguous effect of increasing the scope and force of exclusive rights is to shape the population of business strategies. Strong exclusive rights increase the attractiveness of exclusive-rights-based strategies at the expense of nonproprietary strategies, whether market-based or nonmarket based. They also increase the value and attraction of consolidation of large inventories of existing information with new production.&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;=== When Information Production Meets the Computer Network ===&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;: &lt;/ins&gt;[&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[Chapter 2, section 3]]&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;=== Strong Exclusive Rights in the Digital Environment ===&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;: &lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[[Chapter 2, section 4]]&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;---&lt;/ins&gt;-&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[[John Stuart Mill, On Liberty]] |[[Table of Contents]] | [[2&lt;/ins&gt;. &lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt; Some Basic Economics of Information Production and Innovation|Chapter 2: Summary&lt;/ins&gt;]&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;]&amp;lt;br&amp;gt;[[Talk:Chapter 2, section 2|Discuss The Effects of Exclusive Rights]]&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;&amp;lt;/td&amp;gt;&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;/&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;tr&lt;/ins&gt;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;</summary>
		<author><name>Grandpa Ruh</name></author>
	</entry>
	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=2077&amp;oldid=prev</id>
		<title>Jajo9 at 14:06, 29 June 2006</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=2077&amp;oldid=prev"/>
		<updated>2006-06-29T14:06:42Z</updated>

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				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;← Older revision&lt;/td&gt;
				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;Revision as of 14:06, 29 June 2006&lt;/td&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;&amp;lt;font face=&quot;Bookman Old Style&quot;&amp;gt;&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Software Development, custom software development, offshore  software development, outsourcing software development&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;br&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;br&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;: &lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[[Chapter 2&lt;/del&gt;, &lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;section 1]]&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[http&lt;/ins&gt;:&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;//www.thepublish.com press release]&lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-deleted&quot;&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;press release, articles, business directory, ezines, classifieds, job search&lt;/ins&gt;,&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;business free  b2b search advertising aerospace defense agriculture airlines automotive chemicals computers electronics semiconductors energy utilities &lt;/ins&gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;br&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;br&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;=== The Effects of Exclusive Rights ===&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[http&lt;/ins&gt;:&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;//www&lt;/ins&gt;.&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;ez&lt;/ins&gt;-&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;agents&lt;/ins&gt;.&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;com wholesale atv&lt;/ins&gt;]&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;/&lt;ins style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;div&lt;/ins&gt;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Once we recognize that there are diverse strategies of appropriation for information production, we come to see a new source of inefficiency caused by strong &quot;intellectual property&quot;-type rights. Recall that in the mainstream analysis, exclusive rights always cause static inefficiency - that is, they allow producers to charge positive prices for products (information) that have a zero marginal cost. Exclusive rights have a more ambiguous effect dynamically. They raise the expected returns from information production, and thereby are thought to induce investment in information production and innovation. However, they also increase the costs of information inputs. If existing innovations are more likely covered by patent, then current producers will more likely have to pay for innovations or uses that in the past would have been available freely from the public domain. Whether, overall, any given regulatory change that increases the scope of exclusive rights improves or undermines new innovation therefore depends on whether, given the level of appropriability that preceded it, it increased input costs more or less than it increased the prospect of being paid for one&#039;s outputs.&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;The diversity of appropriation strategies adds one more kink to this story. Consider the following very simple hypothetical. Imagine an industry that produces &quot;infowidgets.&quot; There are ten firms in the business. Two of them are infowidget publishers on the Romantic Maximizer model. They produce infowidgets as finished goods, and sell them based on patent. Six firms produce infowidgets on supply-side (Know-How) or demand-side (Scholarly Lawyer) effects&lt;/del&gt;: &lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;they make their Realwidgets or Servicewidgets more efficient or desirable to consumers, respectively. Two firms are nonprofit infowidget producers that exist on a fixed, philanthropically endowed income. Each firm produces five infowidgets, for a total market supply of fifty. Now imagine a change in law that increases exclusivity. Assume that this is a change in law that, absent diversity of appropriation, would be considered efficient. Say it increases input costs by 10 percent and appropriability by 20 percent, for a net expected gain of 10 percent. The two infowidget publishers would each see a 10 percent net gain, and let us assume that this would cause each to increase its efforts by 10 percent and produce 10 percent more infowidgets. Looking at these two firms alone, the change in law caused an increase from ten infowidgets to eleven - a gain for the policy change. Looking at the market as a whole, however, eight firms see an increase of 10 percent in costs, and no gain in appropriability. This is because none of these firms actually relies on exclusive rights to appropriate its product&#039;s value. If, commensurate with our assumption for the publishers, we assume that this results in a decline in effort and productivity of 10 percent for the eight firms, we would see these firms decline from forty infowidgets to thirty-six, and total market production would decline from fifty infowidgets to forty-seven.&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Another kind of effect for the change in law may be to persuade some of the firms to shift strategies or to consolidate. Imagine, for example, that most of the inputs required by the two publishers were owned by the other infowidget publisher. If the two firms merged into one Mickey, each could use the outputs of the other at its marginal cost - zero - instead of at its exclusive-rights market price. The increase in exclusive rights would then not affect the merged firm&#039;s costs, only the costs of outside firms that would have to buy the merged firm&#039;s outputs from the market. Given this dynamic, strong exclusive rights drive concentration of inventory owners. We see this very clearly in the increasing sizes of inventory-based firms like Disney. Moreover, the increased appropriability in the exclusive-rights market will likely shift some firms at the margin of the nonproprietary business models to adopt proprietary business models. This, in turn, will increase the amount of information available only from proprietary sources. The feedback effect will further accelerate the rise in information input costs, increasing the gains from shifting to a proprietary strategy and to consolidating larger inventories with new production.&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;Given diverse strategies, the primary unambiguous effect of increasing the scope and force of exclusive rights is to shape the population of business strategies. Strong exclusive rights increase the attractiveness of exclusive-rights-based strategies at the expense of nonproprietary strategies, whether market-based or nonmarket based. They also increase the value and attraction of consolidation of large inventories of existing information with new production&lt;/del&gt;.&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;=== When Information Production Meets the Computer Network ===&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;: [[Chapter 2, section 3]]&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;=== Strong Exclusive Rights in the Digital Environment ===&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;: [[Chapter 2, section 4]]&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;--&lt;/del&gt;-&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;-&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt; &lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;[[John Stuart Mill, On Liberty]] |[[Table of Contents]] | [[2&lt;/del&gt;. &lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt; Some Basic Economics of Information Production and Innovation|Chapter 2: Summary&lt;/del&gt;]&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;]&amp;lt;br&amp;gt;[[Talk:Chapter 2, section 2|Discuss The Effects of Exclusive Rights]]&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;&amp;lt;/td&amp;gt;&lt;/del&gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;/&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;tr&lt;/del&gt;&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-side-added&quot;&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;</summary>
		<author><name>Jajo9</name></author>
	</entry>
	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=1791&amp;oldid=prev</id>
		<title>Grandpa Ruh: removed stray ?</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=1791&amp;oldid=prev"/>
		<updated>2006-05-06T16:29:30Z</updated>

		<summary type="html">&lt;p&gt;removed stray ?&lt;/p&gt;
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				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;← Older revision&lt;/td&gt;
				&lt;td colspan=&quot;2&quot; style=&quot;background-color: #fff; color: #202122; text-align: center;&quot;&gt;Revision as of 16:29, 6 May 2006&lt;/td&gt;
				&lt;/tr&gt;&lt;tr&gt;&lt;td colspan=&quot;2&quot; class=&quot;diff-lineno&quot; id=&quot;mw-diff-left-l35&quot;&gt;Line 35:&lt;/td&gt;
&lt;td colspan=&quot;2&quot; class=&quot;diff-lineno&quot;&gt;Line 35:&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;: [[Chapter 2, section 4]]&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;: [[Chapter 2, section 4]]&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;tr&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;−&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&lt;del style=&quot;font-weight: bold; text-decoration: none;&quot;&gt;�&lt;/del&gt;----&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot; data-marker=&quot;+&quot;&gt;&lt;/td&gt;&lt;td style=&quot;color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;----&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;br&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;br&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;[[John Stuart Mill, On Liberty]] |[[Table of Contents]] | [[2.  Some Basic Economics of Information Production and Innovation|Chapter 2: Summary]]&amp;lt;br&amp;gt;[[Talk:Chapter 2, section 2|Discuss The Effects of Exclusive Rights]]&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;[[John Stuart Mill, On Liberty]] |[[Table of Contents]] | [[2.  Some Basic Economics of Information Production and Innovation|Chapter 2: Summary]]&amp;lt;br&amp;gt;[[Talk:Chapter 2, section 2|Discuss The Effects of Exclusive Rights]]&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;/td&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;td class=&quot;diff-marker&quot;&gt;&lt;/td&gt;&lt;td style=&quot;background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;&quot;&gt;&lt;div&gt;&amp;lt;/td&amp;gt;&lt;/div&gt;&lt;/td&gt;&lt;/tr&gt;
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&lt;/table&gt;</summary>
		<author><name>Grandpa Ruh</name></author>
	</entry>
	<entry>
		<id>https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=1790&amp;oldid=prev</id>
		<title>Grandpa Ruh: full text of Chapter 2, section 2</title>
		<link rel="alternate" type="text/html" href="https://cyber.harvard.edu/wealth_of_networks/?title=Chapter_2,_section_2&amp;diff=1790&amp;oldid=prev"/>
		<updated>2006-05-06T16:28:33Z</updated>

		<summary type="html">&lt;p&gt;full text of Chapter 2, section 2&lt;/p&gt;
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[[John Stuart Mill, On Liberty]] |[[Table of Contents]] | [[2.  Some Basic Economics of Information Production and Innovation|Chapter 2: Summary]]&amp;lt;br&amp;gt;[[Talk:Chapter 2, section 2|Discuss The Effects of Exclusive Rights]]&lt;br /&gt;
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== Chapter 2 Some Basic Economics of Information Production and Innovation, section 2: &amp;lt;br&amp;gt;&amp;lt;br&amp;gt;The Effects of Exclusive Rights ==&lt;br /&gt;
&lt;br /&gt;
=== Introduction ===&lt;br /&gt;
&lt;br /&gt;
: [[Chapter 2]]&lt;br /&gt;
&lt;br /&gt;
=== The Diversity of Strategies in our Current Information Production System ===&lt;br /&gt;
&lt;br /&gt;
: [[Chapter 2, section 1]]&lt;br /&gt;
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=== The Effects of Exclusive Rights ===&lt;br /&gt;
&lt;br /&gt;
Once we recognize that there are diverse strategies of appropriation for information production, we come to see a new source of inefficiency caused by strong &amp;quot;intellectual property&amp;quot;-type rights. Recall that in the mainstream analysis, exclusive rights always cause static inefficiency - that is, they allow producers to charge positive prices for products (information) that have a zero marginal cost. Exclusive rights have a more ambiguous effect dynamically. They raise the expected returns from information production, and thereby are thought to induce investment in information production and innovation. However, they also increase the costs of information inputs. If existing innovations are more likely covered by patent, then current producers will more likely have to pay for innovations or uses that in the past would have been available freely from the public domain. Whether, overall, any given regulatory change that increases the scope of exclusive rights improves or undermines new innovation therefore depends on whether, given the level of appropriability that preceded it, it increased input costs more or less than it increased the prospect of being paid for one&amp;#039;s outputs.&lt;br /&gt;
&lt;br /&gt;
The diversity of appropriation strategies adds one more kink to this story. Consider the following very simple hypothetical. Imagine an industry that produces &amp;quot;infowidgets.&amp;quot; There are ten firms in the business. Two of them are infowidget publishers on the Romantic Maximizer model. They produce infowidgets as finished goods, and sell them based on patent. Six firms produce infowidgets on supply-side (Know-How) or demand-side (Scholarly Lawyer) effects: they make their Realwidgets or Servicewidgets more efficient or desirable to consumers, respectively. Two firms are nonprofit infowidget producers that exist on a fixed, philanthropically endowed income. Each firm produces five infowidgets, for a total market supply of fifty. Now imagine a change in law that increases exclusivity. Assume that this is a change in law that, absent diversity of appropriation, would be considered efficient. Say it increases input costs by 10 percent and appropriability by 20 percent, for a net expected gain of 10 percent. The two infowidget publishers would each see a 10 percent net gain, and let us assume that this would cause each to increase its efforts by 10 percent and produce 10 percent more infowidgets. Looking at these two firms alone, the change in law caused an increase from ten infowidgets to eleven - a gain for the policy change. Looking at the market as a whole, however, eight firms see an increase of 10 percent in costs, and no gain in appropriability. This is because none of these firms actually relies on exclusive rights to appropriate its product&amp;#039;s value. If, commensurate with our assumption for the publishers, we assume that this results in a decline in effort and productivity of 10 percent for the eight firms, we would see these firms decline from forty infowidgets to thirty-six, and total market production would decline from fifty infowidgets to forty-seven.&lt;br /&gt;
&lt;br /&gt;
Another kind of effect for the change in law may be to persuade some of the firms to shift strategies or to consolidate. Imagine, for example, that most of the inputs required by the two publishers were owned by the other infowidget publisher. If the two firms merged into one Mickey, each could use the outputs of the other at its marginal cost - zero - instead of at its exclusive-rights market price. The increase in exclusive rights would then not affect the merged firm&amp;#039;s costs, only the costs of outside firms that would have to buy the merged firm&amp;#039;s outputs from the market. Given this dynamic, strong exclusive rights drive concentration of inventory owners. We see this very clearly in the increasing sizes of inventory-based firms like Disney. Moreover, the increased appropriability in the exclusive-rights market will likely shift some firms at the margin of the nonproprietary business models to adopt proprietary business models. This, in turn, will increase the amount of information available only from proprietary sources. The feedback effect will further accelerate the rise in information input costs, increasing the gains from shifting to a proprietary strategy and to consolidating larger inventories with new production.&lt;br /&gt;
&lt;br /&gt;
Given diverse strategies, the primary unambiguous effect of increasing the scope and force of exclusive rights is to shape the population of business strategies. Strong exclusive rights increase the attractiveness of exclusive-rights-based strategies at the expense of nonproprietary strategies, whether market-based or nonmarket based. They also increase the value and attraction of consolidation of large inventories of existing information with new production.&lt;br /&gt;
&lt;br /&gt;
=== When Information Production Meets the Computer Network ===&lt;br /&gt;
&lt;br /&gt;
: [[Chapter 2, section 3]]&lt;br /&gt;
&lt;br /&gt;
=== Strong Exclusive Rights in the Digital Environment ===&lt;br /&gt;
&lt;br /&gt;
: [[Chapter 2, section 4]]&lt;br /&gt;
&lt;br /&gt;
�----&lt;br /&gt;
&lt;br /&gt;
[[John Stuart Mill, On Liberty]] |[[Table of Contents]] | [[2.  Some Basic Economics of Information Production and Innovation|Chapter 2: Summary]]&amp;lt;br&amp;gt;[[Talk:Chapter 2, section 2|Discuss The Effects of Exclusive Rights]]&lt;br /&gt;
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&amp;lt;/tr&amp;gt;&lt;/div&gt;</summary>
		<author><name>Grandpa Ruh</name></author>
	</entry>
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