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On the macroeconomic effects of establishing tradability in weak property rights
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).
2005 (English)In: Entrepreneurships, the New Economy and Public Policy: Schumpeterian Perspectives / [ed] Professor Dr. Uwe Cantner, Professor Elias Dinopoulos, Professor Robert F. Lanzillotti, Springer Berlin/Heidelberg, 2005, 137-162 p.Chapter in book (Refereed)
Abstract [en]

The New Economy is closely associated with computing & communications technology, notably the Internet. We discuss property rights to, and trade in, the difficult-to-define intangible assets increasingly dominating the New Economy, and the possibility of under-investment in these assets. For a realistic analysis we introduce a Schumpeterian market environment (the experimentally organized economy). Weak property rights prevail when the rights to access, use, and trade in intangible assets cannot be fully exercised. The trade-off between the benefits of open access on the Internet, and the incentive effects of strengthened property rights, depend both on the particular strategy a firm employs to secure property rights, and the protection offered by law. Economic property rights can be strengthened if the originator can find innovative ways to charge for the intangible assets. The extreme complexity of the New Economy and the large number of possible innovative private contract arrangements make it more important to facilitate the use and enforcement of private individualized contracts to protect intellectual property than to rely only on standard patent and copyright law. Enabling law is one proposed solution. Current patent legislation in the US has led to costly litigation processes weakening the position of small firms and individuals in patent disputes. The property rights of such firms and individuals could be strengthened with insurance or arbitration procedures.

Place, publisher, year, edition, pages
Springer Berlin/Heidelberg, 2005. 137-162 p.
Keyword [en]
Competence bloc theory, Enabling law, Experimentally organized economy, New economy, Tradability, Underinvestment, Weak property rights
National Category
Economics and Business
URN: urn:nbn:se:kth:diva-144452DOI: 10.1007/3-540-26994-0_9ScopusID: 2-s2.0-84892211748ISBN: 978-3-540-22613-0ISBN: 978-3-540-26994-6OAI: diva2:713604

QC 20140423

Available from: 2014-04-23 Created: 2014-04-23 Last updated: 2014-04-23Bibliographically approved

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