Defining Property Rights: The Case of Knowledge-Based Resources

by Ayse Costello, Thomas Costello



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 include enforcing property rights of companies without alienating consumers and making knowledge-based resources affordable. This article 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-exclusivity of the resource; exchange and policing costs related to the resource; costs of reduced investment created by non-exclusivity of the resource; exchange value of the resource; and the social costs of exclusivity of the resource.

California Management Review

Berkeley-Haas's Premier Management Journal

Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

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