IR-ch1 - Information Rules Chapter 1 I. Introduction a. The...

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Information Rules Chapter 1 I. Introduction a. The infrastructure of the emerging electricity and telephone networks these industrialists transformed the U.S. economy. b. The thesis of this book is that durable economic principles can guide you in today’s frenetic business environment. 1. Technology changes, not economic laws. c. It is difficult to discern patterns to guide business decisions- but there is order in the chaos. d. Ex. Netscape 1. A good example of how economic principles can serve as an early warning system. 2. Netscape is fundamentally vulnerable because its chief competitor, Microsoft, controls the operating environment of which a web browser is but one component. 3. Netscape is facing a classic problem of interconnection : its browser needs to work in conjunction with Microsoft’s operating system. e. Interconnection battle have arisen regularly over the past century in the telephone, the railroad, the airline, and the computer industries. f. Information ( software) g. The infrastructure (hardware) 1. Software and hardware are inexorably linked. 2. Neither software nor hardware is of much value without the other, they are only valuable because they work together as a system. II. Information a. Information is anything that can be digitized- encoded as a stream of bits. b. Some information has entertainment value, and some has business value. c. Consumers differ greatly in how they value particular information goods. d. The Cost of Producing Information 1. Information is costly to produce but cheap to reproduce
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2. Economists say that production of an information good involves high fixed costs but low marginal costs . 3. The cost of producing the first copy of an information good may be substantial, but the cost of producing (or reproducing) additional copies is negligible. 4.
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This note was uploaded on 04/26/2009 for the course MIS 301 taught by Professor Mccleod during the Spring '08 term at University of Texas at Austin.

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IR-ch1 - Information Rules Chapter 1 I. Introduction a. The...

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