Difference between revisions of "Artificial scarcity"
Jump to navigation
Jump to search
(Cpyrighted software is not the same as closed-source software. Open-source vs. closes-source do not relate to distribution economics, rather they relate to development methodologies.) |
|||
| (2 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
'''Artificial scarcity''' is an [[economics|economic]] term describing the [[scarcity]] of items even though the technology and [[Economic production|production]] capacity exists to create an abundance. Artificial scarcity occurs when the price of goods rises above their [[marginal cost]]. The most common causes are [[monopoly]] pricing structures, such as those enabled by [[intellectual property]] rights or by high fixed costs in a particular marketplace. The inefficiency associated with artificial scarcity is formally known as a [[deadweight loss]]. | '''Artificial scarcity''' is an [[economics|economic]] term describing the [[scarcity]] of items even though the technology and [[Economic production|production]] capacity exists to create an abundance. Artificial scarcity occurs when the price of goods rises above their [[marginal cost]]. The most common causes are [[monopoly]] pricing structures, such as those enabled by [[intellectual property]] rights or by high fixed costs in a particular marketplace. The inefficiency associated with artificial scarcity is formally known as a [[deadweight loss]]. | ||
| − | An example of artificial scarcity is often used when describing [[ | + | An example of artificial scarcity is often used when describing [[proprietary software|proprietary]], or [[closed-source]], computer software. Any software application can be easily duplicated billions of times over for a relatively cheap production price (an initial investment in a computer, an internet connection, and any power consumption costs). On the margin, the price of copying software is next to nothing, costing only a small amount of power and a fraction of a second. Things like serial numbers, license agreements, and [[intellectual property]] rights ensure that production is artificially lowered in order for business to gain a monetary benefit, thus giving those in the software and digital arts business their livelihood. Technocrats argue that if the [[Technocratic views of the Price system|the price system]] were removed, there would be no personal [[incentive]] to artificially create scarcity in products, and thus something similar to the [[open source]] model of distributions would exist. |
[[Image:Ppfofdigitalinformation.gif|thumb|right|485px|[[Production possibilities frontier]] of showing trade-off.]] | [[Image:Ppfofdigitalinformation.gif|thumb|right|485px|[[Production possibilities frontier]] of showing trade-off.]] | ||
| Line 37: | Line 37: | ||
| + | |||
| + | == External links == | ||
| + | [http://www.usemod.com/cgi-bin/mb.pl?ZeroSumGame Zero Sum Game] | ||