Correction of Three Methodological Errors in the Economics of Authors' Rights

Abstract

Three methodological errors in the economics of authors’ rights and their consequences.Using a realistic and holistic approach, this theoretic contribution corrects three main assumptions of the economic theory of copyright and explains why they hinder the proper understanding of its role. First, authors’ pieces of work are like a public good that needs the protection of copyright to overcome the free rider problem. However, a piece of work can be spread only with a medium good or service. Such a pair might not possess the properties of a public good like nonexcludability and nonrivalry. The second assumption that copyright enables authors to charge the price above marginal costs was rejected as too simplistic because the copyright affects different markets with pairs work + medium variably and moreover, it ensures for authors a non-market revenue. The complexity of copyright also explains why the third assumption that copyright can be modelled as a single index is meaningless. A new framework for optimisation behaviour of authors is offered.