Difference between revisions of "Artificial scarcity"
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| − | '''Artificial scarcity''' describes the [[scarcity]] of items even though the technology and [[Economic production|production]] capacity exists to create an abundance. The term is aptly applied to non-rival resources, i.e. those that do not diminish due to one person's use, although there are other resources which could be categorized as artificially scarce. 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''' describes the [[scarcity]] of items even though the technology and [[Economic production|production]] capacity exists to create an abundance. The term is aptly applied to non-rival resources, i.e. those that do not diminish due to one person's use, although there are other resources which could be categorized as artificially scarce. 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]]. |
| − | + | With nearly all goods, a trade-off occurs when decisions are made about production. The graph{{which?}} shows the economic anomaly that occurs with artificially scarce products. Because leather boots consume resources, a trade-off is noticed between running shoes and boots; i.e. in order to produce more boots one has to produce fewer running shoes because of limited resources. This trade-off is illustrated by a move from P1 to P2 in the Production Possibilities graph on the left. | |
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| − | With nearly all goods, a trade-off occurs when decisions are made about production. The graph shows the economic anomaly that occurs with artificially scarce products. Because leather boots consume resources, a trade-off is noticed between running shoes and boots; i.e. in order to produce more boots one has to produce fewer running shoes because of limited resources. This trade-off is illustrated by a move from P1 to P2 in the Production Possibilities graph on the left. | ||
With computer software, no significant trade-off occurs. To produce more of a certain piece of digital information, since virtually no resources are used to copy the information there is no trade-off with the production of other things, like shoes and boots. In essence, problems of artificial scarcity usually arise when a good that was once scarce becomes abundant due to extreme increases in productivity and technology.<ref>{{cite web |url=http://www.automation.com/resources-tools/articles-white-papers/articles-by-jim-pinto/the-problems-of-scarcity-abundance |title=The Problems of Scarcity & Abundance |publisher=Automation.com}}</ref> | With computer software, no significant trade-off occurs. To produce more of a certain piece of digital information, since virtually no resources are used to copy the information there is no trade-off with the production of other things, like shoes and boots. In essence, problems of artificial scarcity usually arise when a good that was once scarce becomes abundant due to extreme increases in productivity and technology.<ref>{{cite web |url=http://www.automation.com/resources-tools/articles-white-papers/articles-by-jim-pinto/the-problems-of-scarcity-abundance |title=The Problems of Scarcity & Abundance |publisher=Automation.com}}</ref> | ||
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== Economic actions that create artificial scarcity == | == Economic actions that create artificial scarcity == | ||
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* [[Copyright]] - Grants authors a limited monopoly to copy and distribute their works. | * [[Copyright]] - Grants authors a limited monopoly to copy and distribute their works. | ||
| − | These actions are used to artificially prevent [[market failure]], artificially preserve profits for producers, or artificially reduce costs for a certain group. | + | These actions are used to artificially prevent [[market failure]], artificially preserve profits for producers, or artificially reduce costs for a certain group. |
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== See also == | == See also == | ||
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*[[Post scarcity]] | *[[Post scarcity]] | ||
*[[Disney Vault]] | *[[Disney Vault]] | ||
| − | + | *[[Criticism of intellectual property]] | |
| + | *[[Club good]] | ||
==References== | ==References== | ||
| − | + | {{Reflist}} | |
{{DEFAULTSORT:Artificial Scarcity}} | {{DEFAULTSORT:Artificial Scarcity}} | ||
Revision as of 13:10, 25 May 2012
- ↑ Script error: No such module "citation/CS1".
- ↑ Phi Kappa Phi (1952). Phi Kappa Phi journal. Honor Society of Phi Kappa Phi.