Intellectual Property, Innovation, and Decentralized Decisions

27 Pages Posted: 21 May 2005

See all articles by Tim Wu

Tim Wu

Columbia University - Law School


This essay proposes a new way to assess the desirability of intellectual property rights.

Traditionally, intellectual property assignment is assessed based on a incentive/monopoly pricing tradeoff. I suggest they should be further assessed by their effects on the decision architectures surrounding the property right - their effects on how firms make product innovation decisions. The reason is that different decisional structures for product development can be are fundamental to the performance of firms, industries, and even the economy as a whole.

The organizational economics literature can help with this assessment. It makes an important and useful distinction between hierarchical (centralized) and polyarchical (decentralized) decision architectures. The key point of this paper is that government's decisions with respect to property assignments can steer decision architectures toward a polyarchical or hierarchical architecture, respectively.

Keywords: Innovation, intellectual property, copyright, patent, organization economics, decentralization

Suggested Citation

Wu, Tim, Intellectual Property, Innovation, and Decentralized Decisions. Virginia Law Review, Vol. 92, No. 1, 2005, U of Chicago, Public Law Working Paper No. 97, Available at SSRN:

Tim Wu (Contact Author)

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

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