ABSTRACT
This chapter describes the welfare consequences of the law governing the ownership of information by firms and their employees and the transmission of information from one firm to another. A firm assures rapid depreciation of its valuable information by taking the market actions dictated by the information. Anglo-American law governing the subject may be divided into two sections: information embodied in human capital and information embodied in firms. Human capital is the only important economic asset for which that form of transaction is unavailable. Firms carry information in a web of contractual relations and property rights. A firm that loses a training manual to a competitor suffers a reduction in value. Firms have, of course, resisted the disclosure of information that would be particularly valuable to competitors even though the information might be vitally relevant to an investment decision and the statute expressly exempts trade secrets.
