Information
Rules
Carl Shapiro
Hal R. Varian
Harvard Business School Press
Boston, Massachusetts
A STRATEGIC GUIDE TO
THE NETWORK ECONOMY
Copyright © 1999 Carl Shapiro and Hal R. Varian
All rights reserved
Printed in the United States of America
03 02 01 00 99 5 4 3 2 1
Library of Congress Cataloging-in-Publication Data
Shapiro, Carl.
Information rules : a strategic guide to the network economy /
Carl Shapiro and Hal R. Varian.
p. cm.
Includes bibliographical references and index.
ISBN 0-87584-863-X (alk. paper)
1. Information technology?Economic aspects. 2. Information
society. I. Varian, Hal R. II. Title.
HC79.I55S53 1998
658.4!038?dc21 98-24923
CIP
The paper used in this publication meets the requirements of the American National Standard for
Permanence of Paper for Printed Library Materials Z39.49-1984.
Contents
Preface ix
1 The Information Economy 1
2 Pricing Information 19
3 Versioning Information 53
4 Rights Management 83
5 Recognizing Lock-In 103
6 Managing Lock-In 135
7 Networks and Positive Feedback 173
8 Cooperation and Compatibility 227
9 Waging a Standards War 261
10 Information Policy 297
U vii
Further Reading 319
Notes 327
Bibliography 329
Index 335
About the Authors 351
viii U Contents
1 The
Information
Economy
As the century closed, the world became smaller. The public rapidly
gained access to new and dramatically faster communication technologies.
Entrepreneurs, able to draw on unprecedented scale economies,
built vast empires. Great fortunes were made. The government demanded
that these powerful new monopolists be held accountable under
antitrust law. Every day brought forth new technological ad ...