What Is Information Worth?

Abstract

The low cost of posting the schedule doesn't mean that its value is low; rather, it's difficult to set a high price when many others can offer the same information on a different website. This problem afflicts the entire world of information services. There's often a very large consumer surplus and a very low profit margin. But the result is that information-producing activities, such as scientific research or journalism, are constantly seeking a business plan, since, like water, we assume that they should be cheap or free. Meanwhile, other activities are sold far above their production cost-an extreme example being vacant real estate, which might sell for an enormous price although the seller did nothing to create its value. Given the economics of low marginal cost and high consumer value, it's hard to make a workable business plan for information. Similarly, public libraries, education, and other entities are constantly seeking a better business model.