Table Of ContentThe Economics of Information
Library and Information Science
Text Series
TheSchoolLibraryMediaCenter.5thed.ByEmanuelT.ProstanoandJoyce
S.Prostano
LibraryandInformationCenterManagement.5thed.ByRobertD.Stueart
andBarbaraB.Moran
TheAcademicLibrary:ItsContext,ItsPurpose,andItsOperation.ByJohn
M.Budd
TheSocialSciences:ACross-DisciplinaryGuidetoSelectedSources.2ded.
NancyL.Herron,GeneralEditor
IntroductiontoUnitedStatesGovernmentInformationSources.6thed.By
JosephMorehead
TheEconomicsofInformation:AGuidetoEconomicandCost-Benefit
AnalysisforInformationProfessionals.2ded.ByBruceR.Kingma
ReferenceandInformationServices:AnIntroduction.3ded.RichardE.
BoppandLindaC.Smith,GeneralEditors
DevelopingLibraryandInformationCenterCollections.4thed.ByG.
EdwardEvanswiththeassistanceofMargaretR.Zarnosky
TheCollectionPrograminSchools:Concepts,Practices,andInformation
Sources.2ded.ByPhyllisJ.VanOrden
InformationSourcesinScienceandTechnology.3ded.ByC.D.Hurt
IntroductiontoTechnicalServices.6thed.ByG.EdwardEvansandSandra
M.Heft
TheSchoolLibraryMediaManager.2ded.ByBlancheWoolls
TheHumanities:ASelectiveGuidetoInformationSources.5thed.ByRon
BlazekandElizabethAversa
Wynar’sIntroductiontoCatalogingandClassification.9thed.ByArleneG.
Taylor
IntroductiontoLibraryPublicServices.6thed.ByG.EdwardEvans,
AnthonyJ.Amodeo,andThomasL.Carter
AGuidetotheLibraryofCongressClassification.5thed.ByLoisMaiChan
TheOrganizationofInformation.ByArleneG.Taylor
SystemsAnalysisforLibrariansandInformationProfessionals.2ded.By
LarryN.OsborneandMargaretNakamura
Second Edition
Bruce R. Kingma
2001
LibrariesUnlimited,Inc.
Englewood,Colorado
Copyright©2001BruceR.Kingma
AllRightsReserved
PrintedintheUnitedStatesofAmerica
Nopartofthispublicationmaybereproduced,storedinare-
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withoutthepriorwrittenpermissionofthepublisher.
LibrariesUnlimited,Inc.
P.O.Box6633
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LibraryofCongressCataloging-in-PublicationData
Kingma,BruceR.
Theeconomicsofinformation:aguidetoeconomicandcost-benefitanalysisfor
informationprofessionals/BruceR.Kingma.--2nded.
p.cm.--(Libraryandinformationsciencetextseries)
Includesbibliographicalreferencesandindex.
ISBN1-56308-816-9(pbk.)
1.Costeffectiveness. 2.Informationscience--Economicaspects. I.Title.IISeries.
HD47.4.K562001
658.15'54--dc21
00-050701
To Susan
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Contents
Preface......................................................................................................xi
Chapter1:Introduction..................................................................................1
WhyStudyEconomics?............................................................................2
Economics.................................................................................................4
InformationEconomics.............................................................................6
Summary...................................................................................................8
Notes..........................................................................................................8
Chapter2:Costs..............................................................................................9
FixedandVariableCosts........................................................................10
Marginal,Average,andTotalCosts........................................................12
OpportunityCosts....................................................................................18
OtherCostDefinitions.............................................................................20
SupplyandCosts.....................................................................................21
MarketSupply.................................................................................24
ChangesinMarketSupply..............................................................25
PriceElasticityofSupply........................................................................25
Summary.................................................................................................27
Notes........................................................................................................28
Chapter3:Benefits........................................................................................29
Demand...................................................................................................30
Price.................................................................................................30
ChangesinDemand.........................................................................32
PriceElasticityofDemand......................................................................35
ConsumerSurplus...................................................................................40
Summary.................................................................................................43
Notes........................................................................................................43
Chapter4:Markets.......................................................................................45
TheMarketEquilibrium..........................................................................46
ChangesinDemandandSupply.............................................................47
EconomicEfficiency...............................................................................51
MarketFailure.........................................................................................53
Summary.................................................................................................55
Chapter5:InformationasaPublicGood...................................................57
PublicGoodDemand..............................................................................58
FinancingPublicGoods..........................................................................61
InformationasaPublicGood..................................................................63
Summary.................................................................................................64
vii
viii \ Contents
Chapter6:Externalities................................................................................65
NegativeExternalities.............................................................................66
PositiveExternalities...............................................................................68
BalancingPositiveand
NegativeExternalities.....................................................................70
Summary.................................................................................................72
Chapter7:Monopolies..................................................................................75
MonopolyDemand..................................................................................77
NaturalMonopolies.................................................................................80
Multi-PriceSuppliers..............................................................................85
Summary.................................................................................................88
Chapter8:UncertaintyandRisk.................................................................89
Expectationsandthe
ValueofInformation.......................................................................90
AsymmetricalInformation
andMarkets.....................................................................................92
InformationMarkets................................................................................95
Insurance.........................................................................................96
Education.........................................................................................97
OtherInformationMarkets..............................................................97
ModelingInformationAcquisition..........................................................98
Summary...............................................................................................101
Notes......................................................................................................101
Chapter9:CommodityorPublicGood....................................................103
MarketforBooksandJournals.............................................................104
InformationMarkets..............................................................................107
Summary...............................................................................................110
Chapter10:Pricing.....................................................................................113
UserFeesasAllocationTools...............................................................114
MarginalCostofPricing.......................................................................117
FinancingInformationGoods:
RamseyPrices...............................................................................121
FinancingInformationGoods:
Value-BasedPrices........................................................................123
Summary...............................................................................................125
Notes......................................................................................................125
Chapter11:Time.........................................................................................127
MeasuringtheValueofTime................................................................128
MeasuringOpportunityCosts.......................................................129
ValueofTimeSaved.....................................................................130
ConsumerSurplusandEconomicCost.........................................132
Contents / ix
Congestion.............................................................................................133
PresentValue.........................................................................................136
Summary...............................................................................................139
Notes......................................................................................................140
Chapter12:ResourceSharing...................................................................141
MultipleUsersofInformationResources.............................................141
OpportunityCostofPatronTime..........................................................147
Summary...............................................................................................149
Chapter13:TheCostsandBenefitsofDigitalInformation...................151
CostofAccesstoInformation...............................................................152
ConsumerCosts.............................................................................152
ProducerandIntermediaryCosts..................................................154
PricingofDigitalInformation...............................................................156
Summary...............................................................................................159
Chapter14:NetworkEconomics...............................................................161
PricingofElectronicJournals...............................................................162
RoleofLibrariesina
NetworkedEnvironment...............................................................165
Summary...............................................................................................166
Bibliography..........................................................................................167
Index......................................................................................................175
Description:Designed for those with little or no prior experience in economics, Kingma's popular and highly acclaimed text clearly presents the fundamentals that users need to develop basic skills for simple cost-benefit analyses of goods and services. It provides students, librarians, and information professio
