Soft Information, Hard Sell: The Role of Soft Information in the Pricing of Intellectual Property

36 Pages Posted: 19 May 2004 Last revised: 10 Aug 2010

William N. Goetzmann

Yale School of Management - International Center for Finance; National Bureau of Economic Research (NBER)

Vicente Pons-Sanz

Yale School of Management

S. Abraham Ravid

Yeshiva University - Syms School of Business

Date Written: May 2004

Abstract

There is a growing literature on the differential impact of soft' vs. hard' information on organizational structure and behavior. This study is an attempt to empirically quantify the value of soft information, using a data-base on the market for screenplays. Script quality is difficult to estimate without subjective evaluation. Therefore soft information should be an integral part of the pricing of these intellectual assets. In our empirical analysis, we find that hard information' (reputation) variables as well as soft information' proxies are priced. Screenplays with high soft information content are priced significantly lower than high concept' harder information'- type scripts. We also follow the screenplays to production, and find that buyers seem to be able to forecast the success of a script, paying more for screenplays resulting in more successful films. In other words, high concept' (harder information) screenplays sell for more and result in more successful movies.

Suggested Citation

Goetzmann, William N. and Pons-Sanz, Vicente and Ravid, S. Abraham, Soft Information, Hard Sell: The Role of Soft Information in the Pricing of Intellectual Property (May 2004). NBER Working Paper No. w10468. Available at SSRN: https://ssrn.com/abstract=541685

William N. Goetzmann (Contact Author)

Yale School of Management - International Center for Finance ( email )

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National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Vicente Pascual Pons-Sanz

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

S. Abraham Ravid

Yeshiva University - Syms School of Business ( email )

United States

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