By Christopher Buccafusco
My co-author Chris Sprigman (Univ. of Virginia) and I have just posted a new paper entitled The Creativity Effect. The paper reports on an experiment that we conducted demonstrating that creators of new works value them substantially more than do potential purchasers or mere owners of the works. The paper will be published in the University of Chicago Law Review. Here’s the abstract:
This paper reports the first experiment to demonstrate the existence of a valuation anomaly associated with the creation of new works. To date, a wealth of social science research has shown that substantial valuation asymmetries exist between owners of goods and potential purchasers of them. The least amount of money that owners are willing to accept to part with their possessions is often far greater than the amount that purchasers would be willing to pay to obtain them. This phenomenon, known as the endowment effect, may create substantial inefficiencies in many markets. Our experiment demonstrates the existence of a related “creativity effect”.
We show that the creators of works value their creations substantially more than do both purchasers of their works and mere owners of the works. The creators in our study valued their works (in this case, paintings) more than four times higher than potential buyers did and almost twice as high as mere owners of the works. Further, we provide evidence that these differences are the result of both creators’ irrational optimism about the quality of their work and potentially rational regret aversion associated with selling emotionally endowed property. We conclude by discussing the implications of these findings for intellectual property theory in general and IP licensing in particular. Our findings potentially undermine the classical economic approach to IP rights, and they suggest that IP markets may be less efficient than previously recognized.
You can download the paper here. We would be grateful for your comments.
Professor David Schwartz has recently posted his paper, co-authored with Lee Petherbridge, on the use of legal scholarship by Federal Courts of Appeals. Here's the abstract:
Chief Justice Roberts recently explained that he does not pay much attention to law review articles, reportedly stating that they are not “particularly helpful for practitioners and judges.” Chief Justice Roberts’s criticism echoes that made by other judges, some of whom, like Judge Harry Edwards, have been much more strident in the contention that legal scholarship is largely unhelpful to practitioners and judges. Perhaps inspired by criticisms like those leveled by Chief Justice Roberts and Judge Edwards, legal scholars have sought to investigate the relevance of legal scholarship to courts and practitioners using a variety of means. One avenue of investigation has been empirical, where several studies, using different, and sometimes ambiguous, methodologies have observed a decrease in citation to legal scholarship and interpreted the observation to mean that legal scholarship has lost relevance to courts and practitioners.
The study reported here examines the hypothesis that legal scholarship has lost relevance to courts. Using an original dataset that is substantially more comprehensive than previous studies and empirical techniques, it examines citation to legal scholarship by the United States circuit courts of appeals over the last 59 years. It finds a rather surprising result. Contrary to the claims of Justice Roberts and Judge Edwards, and contrary to the results of prior studies, this study finds that over the last 59 years – and particularly over the last 20 years – there has been a marked increase in the frequency of citation to legal scholarship in the reported opinions of the circuit courts of appeals. Using empirical and theoretical methods, this study also considers explanations for courts’ increased use of legal scholarship.
Download the paper here.