We analyze pricing strategies for digital information goods, such as those increasingly available via the Internet. Because perfect copies of such goods can be created and distributed almost costlessly, any single positive price for copies is likely to be socially inefficient. However, we show...

The Internet has signi.cantly reduced the marginal cost of producing and distributing digital information goods. It also coincides with the emergence of new competitive strategies such as large-scale bundling. In this paper, we show that bundling can create “economies of aggregation” for...

Once purchased, information goods are often shared within small social communities. Software and music, for example, can be easily shared among family or friends. In this paper, we ask whether such sharing will undermine seller profit. We reach several surprising conclusions. We find, for...

A cornerstone of the law and economics approach to standard form contracts is the Òinformed minorityÓ hypothesis: in competitive markets, a minority of term-conscious buyers is enough to discipline sellers from offering unfavorable boilerplate terms. The informed minority argument is widely...

A key property of the World Wide Web is the possibility for firms toplace virtually costless links to third-party content as a substitute orcomplement to their own content. This ability to hyperlink has enablednew types of players, such as search engines and content aggregators, tosuccessfully...

Over the past decade, the rise of the Internet has enabled the emergence of surprising new forms of collective intelligence. Examples include Google, Wikipedia, Threadless, and many others. To take advantage of the possibilities these new systems represent, it is necessary to go beyond just...