Intellectual Property and the Organization of Information Production

Abstract

This paper analyzes an area that economic analysis of intellectual property has generally ignored, namely, the effects of intellectual property rights on the relative desirability of various strategies for organizing information production. I suggest that changes in intellectual property rules alter the payoffs to information production in systematic and predictable ways that differ as among different strategies. My conclusion is that an institutional environment highly protective of intellectual property rights will (a) have less beneficial impact, at an aggregate level, than one would predict without considering these effects, and (b) fosters commercialization, concentration, and homogenization of information production, and thus entails normative implications that may be more salient than its quantitative effects.