An Introduction to the Law & Economics of Information

Abstract

This paper reviews the literature related to the properties of information and legal implications of same, making three observations:

First, scholars have extended a public good model of information to an ever-increasing number of fields where law and information intersect. An incomplete list includes intellectual property, securities regulation, contract theory, consumer protection, communications, and the study of free speech.

Second, scholars have sharply questioned whether, in practice, information actually has the characteristics of a public good. In particular, the claim that information is intrinsically impossible to exclude non-payers from has no clear basis, a fact that potentially undermines theoretical support for some forms of government intervention. A closer look suggests that context, subject matter, and industry structure tends to yield great variation in how much intervention really is required to ensure adequate production or dissemination. This tends to support the existence of dynamic legal regimes attuned to differences in subject matter or perhaps industry structure.

Third, the review questions if the public good concept, while well-established, ought really be the exclusive focus of the economic and legal understanding of information. The article closes by considering other, less investigated, but potentially important, properties of information that have not received as much scholarly attention.