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An experiment on protecting intellectual property

Published online by Cambridge University Press:  14 March 2025

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

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.

Type
Original Paper
Copyright
Copyright © 2014 Economic Science Association

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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.

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