Institutions are important to intellectual property. Information is a major subject of exchange, and the special challenges of contracting over information have long been at the heart of economic theories of contracting. Exchanges involving information are difficult because a buyer will be reluctant to make a purchase without knowing what he is buying, but once the seller reveals the information, the buyer will no longer need to pay for it. Contractors can also face challenges from asymmetric information, and some of the limits on people's ability to contract stem from the problems of incomplete information.

Where does this leave property? Although intellectual property is technically a form of personal property and some of its mechanisms are shared with regular property, commentators have found the notion of intellectual property problematic in a way that regular property is not. Because information itself is nonrival, in that one person's use of it does not diminish the value of another's use of the same information, excluding others from information when they could use it at zero marginal cost seems wasteful. And while intellectual property is one device among many that could provide incentives to people to create information, the nonrival nature of information is a count against intellectual property in comparison with rewards, kudos, lead times, and other alternatives to appropriating the returns from inventive and other creative activity. Should intellectual property be property at all?