Do Patronize Me: The Comparative Political Economy of Arts Patronage, Copyright, and Crowdfunding
31 Pages Posted: 24 Sep 2014 Last revised: 11 Nov 2015
Date Written: November 10, 2015
Traditional wisdom has long argued that copyright laws are necessary to ensure that expressive works, such as books, music, and films, are produced by deterring people from consuming them for free. Recently, a new method of financing expressive works has emerged, known as crowdfunding, where creators can solicit small contributions from a large number of individual patrons. This provides an opportunity to compare the present system of copyright with other potential complements and alternatives. I construct a simple game-theoretic model to argue that patronage of the arts, where a patron sponsors a creator by paying her fixed costs in exchange for some share of the proceeds and the ability to exclude others, constitutes the basic mechanism of effective expressive work production. In fact, both copyright and crowdfunding are variations of the ancient institution of patronage, only substituting different entities for patrons.
Keywords: crowdfunding, Kickstarter, intellectual property rights, copyright, patronage, arts, public goods
JEL Classification: H41, K29, O34
Suggested Citation: Suggested Citation