Copyright (c) 2008 All rights reserved. http://works.bepress.com/bendepoorter Recent documents in Ben Depoorter en-us Wed, 02 Apr 2008 20:37:17 PDT 3600 http://works.bepress.com/bendepoorter/15 http://works.bepress.com/bendepoorter/15 Thu, 06 Mar 2008 18:53:48 PST This Essay advances a proposal that would substantially increase access to justice for valuable law suits that are currently deterred by litigation costs. The proposal has two components. First, under the proposed system a plaintiff is allowed to choose a damage multiplier which determines the amount of damages he or she receives if the case is won. Second, courts select randomly from each case with a probability inverse to the multiplier selected by the plaintiff. Ben Depoorter Torts http://works.bepress.com/bendepoorter/14 http://works.bepress.com/bendepoorter/14 Sun, 04 Mar 2007 03:23:29 PST Ben Depoorter Law and Economics http://works.bepress.com/bendepoorter/13 http://works.bepress.com/bendepoorter/13 Sun, 04 Mar 2007 03:20:43 PST This paper applies a model of complementary oligopoly and anticommons pricing to the market for intellectual property rights. Our model demonstrates a surprising and interesting overlooked result: In the market for complementary goods, price coordination and monopolistic pricing do not necessarily represent inefficient equilibria, when compared to the alternative Nash equilibrium. Due to the peculiar cross-price effects in the supply of complementary goods, price coordination and monopolistic supply often constitute an improvement over the alternative equilibrium outcomes. To be precise, the welfare effects of competition and price coordination depend on the nature of the intellectual product concerned. This has significant and obvious implications for the economic analysis of copyright collectivization, as well as for antitrust regulation in this area. Ben Depoorter Intellectual Property Law http://works.bepress.com/bendepoorter/12 http://works.bepress.com/bendepoorter/12 Sun, 04 Mar 2007 03:16:59 PST Copyright scholars suggest that computer technology has reduced transaction costs associated with copyright transfer, allegedly eliminating the need for the fair use doctrines that were developed to allow limited use of copyrighted material in situations where the transaction costs of securing authorized use would be prohibitive. According to this emerging view, in an ideal world with no contracting costs, third party use of copyrighted material could realistically only take place with the express consent of the copyright holder. This would give the author absolute power to dispose of his work, including the right to veto uses, without the possibility of a fair use override of any sort. This paper shows the limits of such transaction-cost based arguments. If transaction costs provide the dominant economic justification of fair use doctrines, an exogenous reduction of such transaction costs would limit the scope and application of the defense of fair use. Nevertheless, in this paper we suggest that, when viewed in light of the anticommons theory, fair use doctrines retain a valid efficiency justification even in a zero transaction cost environment. Fair use defenses are justifiable, and in fact instrumental, in minimizing the welfare losses prompted by the strategic behavior of the copyright holders. Even if copyright licenses can be transferred at no cost (for instance, in a click and pay frictionless computer world), the strategic behavior of the copyright holders would still create possible deadweight losses. In this context we identify a number of critical variables that should guide and constrain the application of fair use doctrines. These variables include (a) the number of copyright holders; (b) the degree of complementarity between the copyrighted inputs; (c) the degree of independence between the various copyright holders in the pricing of their licenses; and (d) ability to price discriminate. Ben Depoorter Intellectual Property Law http://works.bepress.com/bendepoorter/11 http://works.bepress.com/bendepoorter/11 Sun, 04 Mar 2007 03:00:30 PST Commons and Anticommons problems are the consequence of symmetric structural departures from a unified conception of property. In this paper, we endeavor to provide a dual model of property, where commons and anticommons problems are the consequence of a lack of conformity between use and exclusion rights. The general model is then extended to consider the different equilibria obtained under vertical and horizontal cases of property fragmentation. The paper concludes formulating a hypothesis of legal rules for promoting unity in property. Norbert Schulz Property-Personal and Real http://works.bepress.com/bendepoorter/10 http://works.bepress.com/bendepoorter/10 Sun, 04 Mar 2007 02:46:58 PST Drawing on socio-psychological literature and new data from an empirical study, this Article posits that copyright litigation faces an impossibility theorem: lawsuits against file sharers cannot simultaneously achieve effective deterrence and promote pro-copyright norms. Anti-copyright norms of file swappers are strengthened when the level of copyright enforcement increases, which results in more downloading whenever enforcement is temporarily suspended. Enforcement has an ambivalent effect on individuals who have no experience with file sharing. Severe sanctions do not have a counterproductive effect on copyright norms of such non-file sharers, yet exposure to information on copyright enforcement reinforces the belief or expectation that others are downloading. The Article reflects on the lessons learned from the study, in particular with regard to the policy choices that regulators, courts, and copyright-dependent industries face when approaching the widespread use of copyrighted material on file-sharing networks. These options, including criminal prosecutions of digital piracy, copyright education, self-help strategies, and collective licensing, are evaluated in light of the interaction of deterrence and anti-copyright norms. Ben Depoorter Intellectual Property Law http://works.bepress.com/bendepoorter/9 http://works.bepress.com/bendepoorter/9 Sun, 04 Mar 2007 02:42:25 PST In this paper, we explore the alleged symmetry between commons and anticommons dilemmas. Our experimental results reveal an interesting asymmetry. Anticommons situations generate greater opportunistic behavior than an equivalent commons dilemma (Study 1), and anticommons dilemmas yield a greater risk for underuse compared to commons dilemmas (Study 2). The results of the present study bring to light important deviations from the economic model, suggesting that other factors, such as behavioral attitudes towards property and psychological variables, affect cooperation differently in anticommons and commons dilemmas. Our findings complement the existing experimental literature on commons dilemmas and contradict the presumed economic symmetry of commons and anticommons problems. The identification of relevant parameters constitutes an interesting line of future research. Such research could identify the parameters that differentiate between the behavioral outcomes imposed by the two dilemma types, and identify subjective factors that underlie people's behavior in anticommons dilemmas. Our research attests to the potential gravity of the anticommons problem, and we conclude that it is inadequate to extrapolate findings from the commons to the anticommons dilemma. Sven Vanneste Property-Personal and Real http://works.bepress.com/bendepoorter/8 http://works.bepress.com/bendepoorter/8 Sun, 04 Mar 2007 02:35:42 PST This Article discusses the dynamics of shared political accountability and provides a supply- and demand-side analysis of disaster management. Because multiple levels of government share political accountability in national scale disasters, disaster management is subject to a collective action problem. Introducing the concept of horizontal political externalities, this Article explains the shortcomings of disaster management in terms of asymmetric political accountability costs for ex ante preparedness and ex post relief. In the presence of shared accountability, investments in prevention and relief by one government actor confer positive externalities upon other government actors by reducing the overall chance of being held responsible in ensuing disasters. In contrast, ex post disaster relief involves negative externalities when action by one agency makes other agencies or representatives look worse. Because positive externalities are undersupplied and negative externalities are oversupplied, political externalities distort disaster management policy. When political accountability is shared, no single actor bears the full brunt of accountability. In addition, uncertainty and finger pointing reduce the total sum of political accountability. The different effects of ex ante and ex post disaster management on political accountability may shed light on events before and after Hurricane Katrina. I provide suggestions for further avenues of empirical and theoretical research on this new positive political theory of horizontal political externalities and political accountability losses. Ben Depoorter Law and Economics http://works.bepress.com/bendepoorter/7 http://works.bepress.com/bendepoorter/7 Sun, 04 Mar 2007 02:21:34 PST For law enforcement purposes corruption and fraud are hard battles. Because of the highly secretive and premeditated nature of these crimes, prime witnesses are themselves often implicated in the fraudulent transaction. Promises of immunity and whistle blowing rewards are often required to resolve these information asymmetries. These insights have set a trend, both in scholarship and law enforcement practice, towards reward-based approaches (carrots), as an alternative or complement to punishment based deterrence (sticks). Applying the U.S. False Claims Act (FCA) as an analytical framework, we provide a critical review of the efficiency limitations of whistle blowing. More specifically, the formal model developed in this contribution, reveals a gap between social and private incentives in whistle blowing, both with regard to the decision to pursue litigation and the timing of whistle blowing. First, while an insider will blow the whistle whenever his expected recovery exceeds the expected costs of litigation, enforcement agencies seek to optimize enforcement in the long run. The autonomy of whistle blowers to pursue claims without government involvement, weakens the government's bargaining position and obstructs the government's ability to weigh in wider factors of enforcement (the effect of an individual case on a multiple claim suit, etc.). Second, whenever rewards are tied to recovery, bounty awards create a perverse incentive whereby fraudulent practices are not terminated at a socially optimal point in time. The potential race among whistle blowers cannot mitigate this effect fully because the stigma and loss of opportunities on the job market act as internal constraints on whistle blowing. Ben Depoorter Law and Economics http://works.bepress.com/bendepoorter/4 http://works.bepress.com/bendepoorter/4 Sun, 04 Mar 2007 02:21:33 PST Recently, a new theory has drawn considerable attention in the literature on common property. A number of scholars have pointed to the danger of excessive propertization in the context of what are termed "anticommons" property regimes. Although this theory has found its way into numerous legal and economic applications, the empirical and cognitive foundations of the theory of fragmentation remain unexplored. Based on experimental data, this Article conducts an investigation into the social and personal processes involved in the anticommons. The results confirm the theoretical proposition that anticommons deadweight losses increase with the degree of complementarity between individual parts and with the degree of fragmentation. Our study also provides three novel insights into the problem of fragmentation. First, the data illustrate that individual right holders base their reservation price on a proportion of the expected surplus of the bundler-purchaser, disregarding the objective value of the resource. Second, the experiments suggest that uncertainty amplifies the anticommons pricing effect. Individual right holders ignore the expected value of the purchaser's project, and instead focus on the upper range of profitability and surplus. Willingness to accept is anchored onto a proportion of the maximum profitability, rather than a proportion of the expected benefits of the project. Finally, throughout the experiment reservation prices seem to be consistently lower in cases where there exists large uncertainty within the range of positive outcomes, relative to scenarios where there is relative certainty regarding a positive outcome but which includes the possibility of a (modest) negative outcome. Subjects seem to emphasize the relative low probability of success over the possibility of a negative outcome. The experiment provides clear indications of the pricing effect in settings where complementary units are fragmented over individual right holders. Given the stickiness of initial selling prices, and the prospective costs of the required negotiations to drive prices down to the expected value of the project, value maximizing projects might be abandoned, leading to the tragic outcome of under use or idleness. The results thus reinforce the normative hypothesis of the anticommons: property right systems should be careful in allowing the liberal creation and fragmentation of property rights. Ben Depoorter Property-Personal and Real