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Why Not One Big Database? Principles for Data Ownership

Decision Support Systems, Vol. 15, pp. 267-284, 1995

MIT Sloan Research Paper

18 Pages Posted: 25 Apr 2011  

Marshall W. Van Alstyne

Boston University – Questrom School of Business; Massachusetts Institute of Technology (MIT) - Sloan School

Erik Brynjolfsson

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Stuart Madnick

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: April 23, 1995

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.

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

JEL Classification: C72, C79, D83. M11

Suggested Citation

Van Alstyne, Marshall W. and Brynjolfsson, Erik and Madnick, Stuart, Why Not One Big Database? Principles for Data Ownership (April 23, 1995). Decision Support Systems, Vol. 15, pp. 267-284, 1995; MIT Sloan Research Paper. Available at SSRN: https://ssrn.com/abstract=1820623

Marshall W. Van Alstyne (Contact Author)

Boston University – Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-358-3571 (Phone)

HOME PAGE: http://questromapps.bu.edu/mgmt_new/Profiles/VanAlstyneMarshall.html

Massachusetts Institute of Technology (MIT) - Sloan School ( email )

Center for Digital Business
5 Cambridge Center - NE25, 7th Floor
Cambridge, MA 02142
United States
617-253-0768 (Phone)

HOME PAGE: http://web.mit.edu/marshall/www/home.html

Erik Brynjolfsson

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E53-313
Cambridge, MA 02142
United States
617-253-4319 (Phone)

HOME PAGE: http://digital.mit.edu/erik

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Stuart E. Madnick

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E53-321
Cambridge, MA 02142
United States
617-253-6671 (Phone)
617-253-3321 (Fax)

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