Digital Goods and the New Economy

Danny Quah ()

No 3846, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Digital goods are bit strings, sequences of 0s and 1s, that have economic value. They are distinguished from other goods by five characteristics: digital goods are non-rival, infinitely expansible, discrete, aspatial, and recombinant. The New Economy is one where the economics of digital goods importantly influence aggregate economic performance. This Article considers such influences not by hypothesizing ad hoc inefficiencies that the New Economy can purport to resolve, but instead by beginning from a Arrow-Debreu perspective and asking how digital goods affect outcomes. This approach sheds light on why property rights on digital goods differ from property rights in general, guaranteeing neither appropriate incentives nor social efficiency; provides further insight into why Open Source Software is a successful model of innovation and development in digital goods industries; and helps explain how geographical clustering matters.

Keywords: Aspatial; Emergence; Idea; Information; Innovation; Intellectual asset; Internet; Knowledge; Open source; Weightless economy (search for similar items in EconPapers)
JEL-codes: D60 L12 O30 R12 (search for similar items in EconPapers)
Date: 2003-03
New Economics Papers: this item is included in nep-geo and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
https://cepr.org/publications/DP3846 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Digital Goods and the New Economy (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:3846

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP3846

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().