This paper develops a formal economic model of how different patterns of information sharing in groups can lead to differentiation in their information resources. In particular, it considers how communications technology, which extends individual access to remote resources, can alter the pattern of information sharing and the subsequent growth in these resources. Among several different findings, it suggests, for example, why the information rich could become information richer, how strategic competition reduces information sharing, and how winner-take-all markets arise. Since the model illustrates the mechanisms that can lead to these possible outcomes, changes in its parameters can suggest alternative courses of action that can help to shape different outcomes. Thus, it provides certain policy levers that could be conceptually useful in advancing the interests, for example, of a National Information Infrastructure.
This work was developed as the first of three papers leading to a doctorate in information technology and economics. It was submitted to the 1995 International Conference on Information Systems (ICIS) where it received two nominations for best paper. It has also been featured as the lead story in the MIT Report.
The power of information technology to help individuals realize their preferences has interesting implications for how group associations shift over time. Dramatic cost reductions in IT imply that people can form increasingly targeted - and therefore more exclusive - groups. If their preferences are focused, then individuals' associations can become more homogeneous. On the other hand, if their preferences are diverse, then associations can become more heterogeneous. This paper defines several different measures of group "balkanization" in order to explain what it might mean for a group to fragment. These measures include, for example, group membership, shared information, and communications distance. Fragmentation along any of these lines increase the indices of balkanization. The paper also identifies the conditions under which technology can lead to more or less balkanization. These explanations are presented as a set of principles and shown both algebraically and graphically to facilitate their understanding. The conclusions emphasize that the policy choices we make can significantly affect subsequent integration of social groups because our use of technology can amplify one or another driver of balkanization.
This work was initiated as the second of three papers leading to a doctorate in information technology and economics. It was submitted to the 1996 International Conference on Information Systems (ICIS) where it has received the prize for Best Conference Theme Paper. A shortened and condensed version is also forthcoming in the journal Science.
The third of the three dissertation papers on sharing in information networks is underway but is not yet available.