Asymmetric Market Failure and Prisoner's Dilemma in Intellectual Property
17 UNIVERSITY OF DAYTON LAW REVIEW 853-69 & 871-81 (1992) (symposium article & presentation). Translated into Spanish and published in the LATIN AMERICAN INTELLECTUAL PROPERTY JOURNAL as Fallas Asimeìtricas del Mercado y el Dilema del Prisionero en Propiedad Intelectual, RLAPI 2 (2011).
20 Pages Posted: 25 Apr 2020 Last revised: 27 Apr 2020
Date Written: 1992
When competitors engage in unrestrained copying of each others' intangible products, the structure can resemble a prisoner's dilemma in which free choice leads to unnecessarily low individual payoffs and low social welfare. There are many ways to avoid these low payoffs, such as contract enforcement, direct regulation of copying behavior through IP, and direct government subsidies. All of these modes alter the payoff pattern away from prisoner's dilemma.
When should lawmakers place copyright law or other IP law among the prime options to consider?
Because copyright, patent, misappropriation and the like all work through private-property markets, one key is to look for asymmetric market conditions. That is, compare the likely transaction costs and other sources of disvalue in markets without IP,and in markets with IP.
Keywords: copyright, market asymmetry, copyright, restitution, prisoners' dilemma, misappropriation, IP policy, IP, competition, INS v AP, Of Harms and Benefits, autonomy, allocation
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