Hostname: page-component-7b9c58cd5d-7g5wt Total loading time: 0 Render date: 2025-03-16T21:46:58.862Z Has data issue: false hasContentIssue false
  • English
  • Français

An experiment on protecting intellectual property

Published online by Cambridge University Press:  14 March 2025

Joy A. Buchanan  and
Bart J. Wilson
Joy A. Buchanan*
Affiliation:
Interdisciplinary Center for Economic Science, George Mason University, Arlington, VA, USA
Bart J. Wilson*
Affiliation:
Economic Science Institute, Chapman University, Orange, CA, USA
*
joyabuchanan@gmail.com
bartwilson@gmail.com
Get access Rights & Permissions [Opens in a new window]

Abstract

We conduct a laboratory experiment to explore whether the protection of intellectual property (IP) incentivizes people to create non-rivalrous knowledge goods, foregoing the production of other rivalrous goods. In the contrasting treatment with no IP protection, participants are free to resell and remake non-rivalrous knowledge goods originally created by others. We find that creators reap substantial profits when IP is protected and that rampant pirating is common when there is no IP protection, but IP protection in and of itself is neither necessary nor sufficient for generating wealth from the discovery of knowledge goods. Rather, individual entrepreneurship is the key.

Keywords

Intellectual propertyExperimental economics

JEL classification

K39: Other D89: Other C92: Laboratory, Group Behavior
Type
Original Paper
Information
Experimental Economics , Volume 17 , Issue 4 , December 2014 , pp. 691 - 716
Copyright
Copyright © 2014 Economic Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Electronic Supplementary Material The online version of this article (doi:https://doi.org/10.1007/s10683-013-9390-8) contains supplementary material, which is available to authorized users.

We gratefully acknowledge the financial support of the International Foundation for Research in Experimental Economics and Chapman University. We also thank Jeffrey Kirchner for his superb software programming and Alex Bogart and Michael Gamboa for their capable research assistance. This paper has benefitted from comments from an editor, three anonymous referees, Bruce Chen, Doug Davis, Mike McBride, Roman Sheremeta, and brownbag and conference participants at Chapman University, University of Chicago, Gruter Institute Conference on Law, Institutions, and Human Behavior, the Southern California on Applied Microeconomics, the Southern Economic Association Meetings, and the Association of Private Enterprise Education. The data and source code in VB.net are available upon request and upon acceptance for publication.

References

Benkler, Y. (2006). The wealth of networks: how social production transforms markets and freedom, New Haven: Yale University Press.Google Scholar
Bessen, J. E., & Meurer, M. J. (2008). Do patents perform like property. Academy of Management Perspectives, 22(3), 8–20. 10.5465/AMP.2008.34587991CrossRefGoogle Scholar
Boldrin, M., & Levine, D. K. (2002). The case against intellectual property. American Economic Review (Papers and Proceedings), 92(2), 209–212. 10.1257/000282802320189267CrossRefGoogle Scholar
Boldrin, M., & Levine, D. K. (2008). Against intellectual monopoly, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Camerer, C., & Lovallo, D. (1999). Overconfidence and excess entry: an experimental approach. The American Economic Review, 89(1), 306–318. 10.1257/aer.89.1.306CrossRefGoogle Scholar
Cardon, M. S., Wincent, J., Singh, J., & Drnovsek, M. (2009). The nature and experience of entrepreneurial passion. The Academy of Management Review, 34(3), 511–532. 10.5465/AMR.2009.40633190CrossRefGoogle Scholar
Crockett, S., Smith, V. L., & Wilson, B. J. (2009). Exchange and specialisation as a discovery process. Economic Journal, 119, 1162–1188. 10.1111/j.1468-0297.2009.02254.xCrossRefGoogle Scholar
Ederer, F., & Manso, G. (2013). Is pay-for-performance detrimental to innovation?. Management Science, 59(7), 1496–1513. 10.1287/mnsc.1120.1683CrossRefGoogle Scholar
Galasso, A., & Schankerman, M. A. (April 2013). Patents and cumulative innovation: causal evidence from the courts. CEPR Discussion Paper No. DP9458.CrossRefGoogle Scholar
Gans, J. S., Hsu, D. H., & Stern, S. (2002). When does start-up innovation spur the gale of creative destruction?. The Rand Journal of Economics, 33(4), 571–586. 10.2307/3087475CrossRefGoogle Scholar
Gilbert, R., & Shapiro, C. (1990). Optimal patent length and breadth. Journal of Industrial Economics, 21, 106–112.Google Scholar
Hayek, F. A. (1988). The fatal conceit, Chicago: The University of Chicago Press 10.7208/chicago/9780226321158.001.0001CrossRefGoogle Scholar
Jaworski, T., & Wilson, B. J. (2013). Go west young man: self-selection and endogenous property rights. Southern Economic Journal, 79(4), 886–904. 10.4284/0038-4038-2011.249CrossRefGoogle Scholar
Kimbrough, E. O., Smith, V. L., & Wilson, B. J. (2010). Exchange, theft and the social formation of property. Journal of Economic Behavior & Organization, 74(3), 206–229. 10.1016/j.jebo.2010.03.017CrossRefGoogle Scholar
Kirzner, I. (1973). Competition and entrepreneurship, Chicago: The University of Chicago Press.Google Scholar
Landes, W. M., & Posner, R. A. (2003). The economic structure of intellectual property law, Cambridge: The Belknap Press of Harvard University.Google Scholar
Lerner, J. (2009). The empirical impact of intellectual property rights on innovation: puzzles and clues. American Economic Review (Papers & Proceedings), 99(2), 343–348. 10.1257/aer.99.2.343CrossRefGoogle Scholar
Longford, N. T. (1993). Random coefficient models, New York: Oxford University Press.Google Scholar
Mokyr, J. (2009). Intellectual property rights, the industrial revolution, and the beginnings of modern economic growth. American Economic Review (Papers & Proceedings), 99(2), 349–355. 10.1257/aer.99.2.349CrossRefGoogle Scholar
Moser, P. (2005). How do patent laws influence innovation? Evidence from nineteenth-century world’s fairs. The American Economic Review, 95(4), 1214–1236. 10.1257/0002828054825501CrossRefGoogle Scholar
Palich, L. E., & Bagby, D. R. (1995). Using cognitive theory to explain entrepreneurial risk-taking: challenging conventional wisdom. Journal of Business Venturing, 10, 425–438. 10.1016/0883-9026(95)00082-JCrossRefGoogle Scholar
Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. The Academy of Management Review, 25(1), 217–226.Google Scholar
Shane, S., Locke, E. A., & Collins, C. J. (2003). Entrepreneurial motivation. Human Resource Management Review, 13(2), 257–279. 10.1016/S1053-4822(03)00017-2CrossRefGoogle Scholar
Stiglitz, J. E. (2008). Economic foundations of intellectual property rights. Duke Law Journal, 57, 1693–1724.Google Scholar
Wilson, B. J., Jaworski, T., Schurter, K. E., & Smyth, A. (2012). The ecological and civil mainsprings of property: an experimental economic history of whalers’ rules of capture. Journal of Law, Economics, & Organization, 28(4), 617–656. 10.1093/jleo/ewr024CrossRefGoogle Scholar
Supplementary material: File

Buchanan and Wilson supplementary material

Appendix A
Download Buchanan and Wilson supplementary material(File)
File 1.3 MB