Why Not One Big Database? Principles for Data Ownership

Abstract:     
This research addresses incentive principles that drive information sharing and affect database value. Many real world centralization and standardization efforts have failed, typically because departments lacked incentives or needed greater local autonomy. While intangible factors such as "ownership" have been described as key to providing incentives, these soft issues have largely eluded formal characterization. Using an incomplete contracts approach from economics, we model the costs and benefits of reorganizing control, including intangible factors, by explicitly considering the role of data "ownership." There are two principal benefits of this approach. First, it defines mathematically precise terms for analyzing incentive costs and benefits of differing control rights. Second, this theoretical framework leads to development of seven normative principles for improved database design. These principles offer guidance for outsourcing, decentralizing control, and standardization. Applications are illustrated through case histories.

Number of Pages in PDF File: 18

Keywords: Distributed Database Design, Incomplete Contracts, Centralization, Decentralization, Standards, Outsourcing, Converters, Economic Models

JEL Classification: C72, C79, D83. M11

Accepted Paper Series