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The Law and Economics Analysis of Intellectual Property: Paradigmatic Shift From Incentives to Traditional Property

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  • Salzberger Eli M.

    (The Faculty of Law, University of Haifa)

Abstract

This paper focuses on the normative analysis of intellectual property rights, in light of the technological revolution of the Internet and accompanying technologies. After a brief overview of the various philosophical justifications for awarding intellectual property rights, it identifies two major Law and Economics paradigms for the analysis of intellectual property: the incentives paradigm, which is founded upon the public goods analysis of neo-classical microeconomic theory, and the tragedy of the commons literature, which is based on the economic analysis of externalities. The paper raises several points of critique towards both frameworks of analysis and especially towards their inability to point to the desirable extent of intellectual property rights (IPR) and the direction of their reform required as the result of the recent technological revolution. It further criticizes the dominant contemporary Law and Economics writings in this field as shifting to a new proprietary paradigm that pre-assumes information to be an object of property, overlooking its fundamental differences from physical property and focusing on its management rather than on its initial justifications. The paper is concluded with some tentative thoughts on the general notion of "Property Rights" in light of the contemporary approach concerning intellectual property.

Suggested Citation

  • Salzberger Eli M., 2011. "The Law and Economics Analysis of Intellectual Property: Paradigmatic Shift From Incentives to Traditional Property," Review of Law & Economics, De Gruyter, vol. 7(2), pages 435-480, December.
    • Handle: RePEc:bpj:rlecon:v:7:y:2011:i:2:n:5
    DOI: 10.2202/1555-5879.1545
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