Title: THE REMARKABLE PROPERTIES OF KNOWLEDGE AS AN ECONOMIC GOOD: A NOTE

Abstract

In this paper we review the three properties that qualify knowledge as an economic good and determine the main dilemma of the economics of knowledge, i.e. the conflict between the social goal of efficient use of knowledge once it has been produced, and the goal of providing ideal motivation to the private producer. In order to fully grasp the implications of each property, we consider in the first section the extreme case of codified knowledge (appearing in the form of a manual of codified instructions) for which those properties are very strong. Such a case generates a kind of very “pure” world in which we can see very clearly the economic problems of public good and knowledge dilemma (section 2). In section 3 we will progressively qualify this fiction to show to what extent the economic problems are reduced as we get away from the extreme case of knowledge defined as "codified instructions". In our conclusion, however, we note that a twofold phenomenon that is characterizing the emergence and development of the knowledge-based economy (i.e. the long-term trend relating to the huge increase in resources devoted to the production, transmission, and management of knowledge, on the one hand, and the advent of new information and communication technologies, on the other hand) makes that we are getting closer to the hypothetical world; a world in which the marginal cost of learning, formatting and transmitting knowledge constantly decreases, giving rise to a massive growth of knowledge externalities.