On the market value of information commodities. III. Demand price

Abbe Mowshowitz

Journal of the American Society for Information Science, 1992, vol. 43, issue 3, 242-248

Abstract: The derived‐demand price of an information commodity depends on the commodity's cost impact on a user's production process. We model an arbitrary production process as a collection of interrelated tasks which can be represented in the form of a production digraph. The nodes of the digraph represent the subtasks in the production process. A directed edge from node a to node b signifies that the subtask corresponding to node b, in order to perform its function, requires input from the subtask corresponding to node a. Appropriate weights, representing costs, are assigned to nodes and arcs. The production digraph allows for investigating cost reduction possibilities. To reduce production costs we have to lower subtask‐costs, or lower the total by restructuring. The trick is to determine which subtasks to choose as reduction candidates, or to discover how to restructure the production process so as to reduce the costs. The digraph model is used, in particular, to estimate the maximum price a user should be willing to pay for an information commodity. If a producer could, by introducing some information commodity, lower production costs by x dollars, the user may be willing to pay as much as x dollars for the commodity. © 1992 John Wiley & Sons, Inc.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1002/(SICI)1097-4571(199204)43:33.0.CO;2-5

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jamest:v:43:y:1992:i:3:p:242-248

Ordering information: This journal article can be ordered from
https://doi.org/10.1002/(ISSN)1097-4571

Access Statistics for this article

More articles in Journal of the American Society for Information Science from Association for Information Science & Technology
Bibliographic data for series maintained by Wiley Content Delivery ().