On the market value of information commodities. I. The nature of information and information commodities

This article lays the conceptual foundations for the study of the market value of information commodities. The terms “information” and “commodity” are given precise definitions in order to characterize “information commodity,” and thus to provide a sound basis for examining questions of pricing. Information is used by marketplace actors to make decisions or to control processes. Thus, we define information as the ability of a goal‐seeking system to decide or control. By “decide” we mean choosing one alternative among several that may be executed in pursuit of a well‐defined objective. “Control” means the ordering of actions. Two factors make it possible to turn something into a commodity: (1) appropriability, and (2) valuability. If something cannot be appropriated (i.e., owned), it cannot be traded; moreover, if it cannot be valued, there is no way to determine for what it might be exchanged. We define an information commodity as a commodity whose function it is to enable the user, a goal‐seeking system, to obtain information, i.e., to otain the ability to decide or control. Books, databases, computer programs, and advisory services are common examples of information commodities. Their market value derives from their capacity to furnish information. © 1992 John Wiley & Sons, Inc.