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    Strategic bundling: Information products, market power, and the future of globalization

    Guy, Frederick (2007) Strategic bundling: Information products, market power, and the future of globalization. Review of International Political Economy 14 (1), pp. 26-48. ISSN 0969-2290.

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    Strange argued that barriers to trade have fallen because increasing returns in product development and production: rising R&D costs, short product life cycles and low marginal costs of production raise the relative cost of producing for protected national markets. As an explanation for global ( as opposed to regional) liberalization, Strange's argument requires that increasing returns be extreme. The class of products exhibiting the most extreme increasing returns is that of information products-goods such as general purpose computer software and digitized entertainment. Following Strange's reasoning, it might seem that the technological nature of information products is one of the drivers of global trade liberalization. The trouble with this argument is that while the technological properties of information products are necessary for extreme increasing returns, they are not sufficient. Increasing returns in information products are cemented by business models which leverage small portfolios of intellectual property into the control of markets. Information products are, however, equally well suited to other business models in which increasing returns are slight and competitors are many. To continue with the software and entertainment examples earlier, these include models based on free software, and on disintermediated markets for digitized entertainment. At present, the institutional structures within which information products are made and sold, are contested. The outcome of these contests could result either in the maintenance of monopoly power and increasing returns, or a shift to far more competitive and decentralized market structures. If the latter occurs, the increasing returns imperative for global trade liberalization would be weakened.


    Item Type: Article
    Additional Information: The publisher has imposed a 18 month embargo on the open availability of the text of this item. The full text will be available through Birkbeck ePrints in August 2008.
    Keyword(s) / Subject(s): intellectual property rights, information, trade, globalization
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Research Centres and Institutes: Innovation Management Research, Birkbeck Centre for
    Depositing User: Administrator
    Date Deposited: 14 Mar 2007
    Last Modified: 02 Aug 2023 16:47


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