Economics of Information Goods信息商品经济学.pptVIP

Business of Entertainment All products contain some degree of information. Entertainment products contain a higher degree of information and smaller component of physical inputs than most other products. The Internet Economy is particularly suited to the transmission of information goods. We begin with a review of Useful Economic Concepts that you may or may not have had in the past (in MECO 6303, say). Economic Assumption: Scarcity Our wants are greater than our abilities to fulfill them (scarcity). Factually correct throughout history. If we do not have scarcity, then everyone has as much of all products as they want. There would be no trading, no markets, and no prices. The problem of scarcity could in principle be ‘solved’ either by increasing output or decreasing wants. Some religious or philosophical movements work on decreasing wants; Capitalism tends to go the increasing output route. Assumption: Economic Actors Are Rational Voluntary actions are only undertaken when they are expected to make people better off. Consumers try to get the best deal on products they buy and they only buy products when they believe the product provides greater value to them than what they pay (the next best values for the money). Producers try to maximize profits. Some Useful Economic Concepts Supply and Demand Elasticity Price Discrimination Public (Information) Goods Consumer and producer surplus Fixed and Variable Costs Demand Defined for a single market – particular product and particular consumers. Each unit of the good is identical to all other units. represents highest price consumers are willing to pay. Holds everything but price and quantity constant (income, price of other goods, gravity, Y2k problems….) time dimensions law of demand – demand slopes down – based on empirical observation. movement along versus movement on Area under demand = total value of that output Supply: Represents minimum price sellers require to voluntarily provide the product. assume it s