The Economics and Sociality of Sharing Intellectual Property
61 Pages Posted: 5 Dec 2014
Date Written: December 3, 2014
Intellectual property law assumes that people need monetary incentives to create; to this end, it enables the formation of markets for intellectual works. Remarkably, however, sharing — i.e., socially mediated gifting without any expectation of payment — may work much better than markets for distributing the bulk of intellectual property. This Article explains why. While markets work by using money as the medium of exchange, money is actually a poor incentive for creative labors. Emerging research shows that payment in the currency of gratitude and social validation is a far more effective form of encouragement, and it is something sharing is exquisitely adapted to provide. In addition, sharing can offer a surprising efficiency advantage over markets by lowering net transaction costs.
Despite its virtues, sharing of intellectual property rights has received scant attention in the literature. Thus, this Article provides a comprehensive account of intellectual property sharing, explaining what motivates people to share, how sharing compares to markets, what barriers may inhibit sharing, and how to overcome those barriers.
The analysis provided here yields a variety of insights about the functioning of real-world transactional systems that deal in intellectual property entitlements. For example, the contemporary stock photography market appears to thrive despite the fact that most photographers receive only negligible remuneration. This Article resolves the paradox by showing that this “market” is better characterized as a dysfunctional sharing scheme — one that could be made more efficient by being transformed into an explicitly social, non-monetary enterprise. In addition, this Article examines Creative Commons, a nonprofit program that offers a suite of formal, standardized licenses to surrender selected copyright entitlements. This Article uncovers how the design of Creative Commons is not aligned with people’s natural motivations to share, but how, with some modification, it could be. Finally, this Article puts forward a different model for the distribution of rights to intellectual works: informal person-to-person sharing, which has great potential to build our society’s creative wealth.
Keywords: intellectual property, behavioral economics, copyright, economics, sharing, photography, free
JEL Classification: D47, D49, K11, O34, O35
Suggested Citation: Suggested Citation