Digital data behaves like a physical resource that loses its value as it is used or hoarded, according to the laws of thermodynamics.
April 25, 2026
Original Paper
Data as a Rival Good: A Thermodynamics Approach
SSRN · 6623398
The Takeaway
Data is not an infinite resource that can be copied forever without consequence. This framework shows that information has free energy that depreciates over time. Economists usually treat data as non-rival, but the math proves it behaves more like gold or oil. When too many people use the same data, its unique economic value collapses. This change in perspective could transform how companies price and protect their information assets.
From the abstract
Standard economic theory classifies data as a non-rival good on the grounds that digital information can be copied at near-zero marginal cost. I argue that this classification does not reflect the evidence of how data generates economic value. Data depreciates, is hoarded, commands a freshness premium, and yields unequal returns to firms with different analytical capabilities-signatures of a rival good, not a non-rival one. The explanation I propose is structural: the economically relevant objec