Technical Information and Industrial Structure

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Abstract
This paper attempts to relate the role of information in production to the organization of industry, particularly the organization into firms and the competitive behavior of these firms. Its emphasis is technical information or the knowledge needed to produce goods. Information is an economic good but it has many characteristics which differentiate it from the goods usually modeled in economics. In particular, it is surprising to find how poorly current theories apply to the situation of high fixed costs which arises when information acquisition becomes a major part of a firm's activity. The paper concludes by conjecturing an increasing tension between legal relations and fundamental economic determinants. In addition, unresolved problems in the economic theory of pricing and competition arise in an economy in which information is important for both cost and utility, producing conditions of competition between firms that are conducted under large fixed costs. Standard paradigms for modeling this competition are inadequate since they postulate a market price in the sense that buyers can buy at their pleasure at a fixed price. s The role of information requires a new approach to the theory of oligopoly.

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