Mind Control: Firms and the Production of Ideas
25 Pages Posted: 16 Sep 2014
Date Written: 2012
We see a wide variation of organization for idea creation. Some creative production is done solely on the market. Other creative production is done within collaborative firms under the direction of a hierarchy. And yet none of these variations in the organization of the production of new ideas can be explained by the strength or weakness of property rights in the end product. Nor can they be explained solely by ownership of residual rights to control hold up. This Essay, thus, highlights an area of intellectual production that cannot be explained by the existing literature on intellectual property and the theory of the firm, and it suggests that some underappreciated alternate theories — like team production — might be at play. I do not claim that the conclusions found in the existing literature are incorrect, but rather that they are limited in scope. Property-rights theories tell us about whether and how an existing intellectual input or the modular unit that produces it will be integrated within a larger development firm but less about how the input will be created in the first place — that is, how the modular unit will itself be organized. I present examples of idea production that conflict with the existing theories to demonstrate these limitations. I focus largely on the field of copyright, showing that the primacy of idea creation for copyrightable work places virtually the entire field outside the realm of existing theories.
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