The free rider problem – and opportunity: you heard it first at Troppo

Well I’ve been going on and on about it, but here’s an academic paper contrasting the free rider problem and opportunity.

Knowledge Properties and Economic Policy: A New Look

By Antonelli, Cristiano (University of Turin)
This paper explores the full range of effects of knowledge properties and explains how knowledge properties such as transient appropriability, nonexhaustibility and indivisibility do not only have negative effects, but also positive ones. Knowledge externalities help reduce the cost of knowledge and imitation externalities reduce the revenue and profitability of innovations. Their effects need to be considered jointly in a single analytical framework. An analysis of their combined effects questions the scope of application of the “Arrovian postulate” according to which the limited appropriability of knowledge due to its uncontrolled dissemination reduces invention. This ignores spillovers of outside knowledge, which increase invention. These are the two opposing faces of the limited appropriability of knowledge. Policy implications suggest that along with public interventions designed to support the supply of knowledge and to compensate for missing incentives, much attention should be paid to all interventions that favour the dissemination of knowledge and the knowledge connectivity of the system.

This entry was posted in Economics and public policy, Information, Intellectual Monopoly Privileges, Intellectual Property, IT and Internet. Bookmark the permalink.

One Response to The free rider problem – and opportunity: you heard it first at Troppo

  1. John Clarke says:

    I have no idea what any of that means, but I’m pretty sure I agree with it.

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