The Economics of Copyright ‘Fair Use’ in a Networked World

5 Pages Posted: 9 Jul 2011  

Andres V. Lerner

Compass Lexecon

Kevin M. Murphy

University of Chicago; National Bureau of Economic Research (NBER)

Benjamin Klein

University of California, Los Angeles (UCLA) - Department of Economics; Compass Lexecon

Date Written: 2002

Abstract

The recent success of file-sharing technologies such as Napster has highlighted the economic question of whether copying increases or decreases the market value of copyrighted works. Contrary to Michele Boldrin and David K. Levine (2002), we show that Napster-type services are likely to reduce copyright value. This economic question of the effect of copying on copyright value largely coincides with the legal question of whether copying is “fair use.” The primary legal determinant of “fair use” (or use that does not require authorization by the copyright-holder) is whether the use adversely affects the present or future economic value of the copyrighted work. However, given this legal standard, it is unclear why copyright holders ever disagree with the court regarding “fair use.” Our analysis shows that there is no inherent conflict between the court and copyright holders with regard to particular uses, but why there may be a conflict with regard to a technology that has both “fair” and infringing uses.

JEL Classification: L10, K2

Suggested Citation

Lerner, Andres V. and Murphy, Kevin M. and Klein, Benjamin, The Economics of Copyright ‘Fair Use’ in a Networked World (2002). American Economic Review, Vol. 92, No. 2, May 2002. Available at SSRN: https://ssrn.com/abstract=1657702

Andres V. Lerner

Compass Lexecon ( email )

1999 Avenue of the Stars
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HOME PAGE: http://www.compasslexecon.com/professionals/pages/bio.aspx?ID=155

Kevin M. Murphy

University of Chicago ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7280 (Phone)
773-702-2699 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Benjamin Klein (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

1999 Avenue of the Stars
Suite 1150
Los Angeles, CA 90067-4628
United States
310-728-2025 (Phone)
310-728-2070 (Fax)

HOME PAGE: http://www.econ.ucla.edu/people/Faculty/Klein.html

Compass Lexecon ( email )

1999 Avenue of the Stars
Suite 1150
Los Angeles, CA 90067-4628
United States
310-728-2025 (Phone)
310-728-2070 (Fax)

HOME PAGE: http://www.compasslexecon.com/professionals/bio?id=152

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