DP3317 | Matching Demand and Supply in a Weightless Economy: Market-Driven Creativity With and Without IPRs

Author(s)

Publication Date

20/04/2002

JEL Code(s)

Keyword(s)

Programme Area(s)

Abstract

Many cultural products have the same non-rival nature as scientific knowledge. They therefore face identical difficulties in creation and dissemination. One traditional view says market failure is endemic ? societies tolerate monopolistic inefficiency in intellectual property (IP) protection to incentivize the creation and distribution of intellectual assets. This Paper examines that trade-off in dynamic, representative agent general equilibrium, and characterizes socially efficient creativity. Markets for intellectual assets protected by IP rights can produce too much or too little innovation.