Defining Property Rights: The Case of Knowledge-Based Resources

Abstract

Advances in information technology, together with increasing economic globalization, are creating dilemmas regarding the levels of definition of property rights that exist over knowledge-based resources. The issues at stake indude enforcing property rights of companies without alienating consumers and making knowledge-based resources affordable. This artide proposes a framework that can help resolve these dilemmas and predict the costs versus benefits of defining the property rights over resources. The costs versus benefits are mainly determined by: capture costs and rent dissipation created by non-exdusivity of the resource; exchange and policing costs related to the resource; costs of reduced investment created by non-exdusivity of the resource; exchange value of the resource; and the social costs of exdusivity of the resource.