ABSTRACT
This chapter discusses a theory of the demand for Information Analysis Center (IAC) services—a theory consistent with accepted economic theory and consistent with the observations on demand for these services. It describes an economic model that appears to successfully account for a number of qualitative observations on the characteristics of the market demand for IAC services. The chapter deals with a conceptual approach to cost-benefit analysis (CBA) using the model. The model and results are generalizable, with some loss of tractability, to the provision of many other information services. The CBA of an IAC demands the introduction of two additional concepts: the social demand curve and the average cost curve. The social demand curve shows society's willingness to pay for each incremental quantity of information, where society includes the user. Only in the instance that an IAC provides totally unique information can the IAC's value be measured by the value of the information.
