Saturday, September 22, 2007

The Rules of the Game

Free market economies succeed by virtue of competition. But what rules should govern that competition? A producer in a market can put another producer out of business by making a better product but not by burning down his factory. That much seems obvious. Sometimes, however, it is harder to determine what the rules should be.

A fascinating example is unfolding at Harvard. The Coop is the university-affiliated bookstore, which stocks textbooks for courses (and I believe is run by Barnes and Noble). The store called the cops when some students who operate a bookselling website started copying down prices and ISBN numbers and then refused to leave when asked.

Was the Coop in the right? After all, the Coop is private property, and perhaps it should be able to regulate behavior on its premises and exclude anyone it wants. On the other hand, the Coop opens itself to the public, and the students were only examining merchandise it was offering for sale.

Which side would you take, if you were setting the rules of the game?