Information goods are characterized by high fixed (first-copy) costs, but very low costs for the production of additional copies. Marginal costs of electronically-delivered information goods have been further reduced by the remarkable recent decline in computing and digital communication costs....

In an automated market for electronic goods new problems arise that have not been well studied previously. For example, information goods are very flexible. Marginal costs are negligible and nearly limitless bundling and unbundling of these items are possible, in contrast to physical goods....