Working Paper: CEPR ID: DP18237
Authors: Alberto Galasso
Abstract: This paper studies the creative process in a model where the level and direction of artistic effort are affected by judicial copyright enforcement. The analysis compares the performance of common sanctioning rules employed by U.S. courts in infringement cases and provides an economic micro-foundation for the independent creation defense in copyright law. Using a mechanism design approach, the paper highlights the benefits of complementing copyright litigation with a system of compulsory licensing. A calibration of the model to fit a leading music infringement case suggests that the damages awarded by courts may stifle creativity, as they substantially exceed those required to deter excessive entry and copying.
Keywords: copyright; music; litigation; courts
JEL Codes: K41; O34; L82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| judicial copyright enforcement (K11) | level and direction of artistic effort (Z11) |
| burden of proof in infringement cases (K41) | composers' incentives to create (Z11) |
| higher expected sanctions (K40) | incentives for independent creators to compose (O31) |
| access to original works (Y20) | composers' creative efforts (Z11) |
| independent creation defense (O39) | welfare (I38) |
| externalities generated by independent creators and those with access (O36) | differentiated legal treatment (K38) |
| compulsory licensing (D45) | optimal judicial mechanism (K41) |
| current judicial practices (K40) | stifle creativity (O34) |