Forever Minus a Day? Some Theory and Empirics of Optimal Copyright

Posted on 9 July 2007

Update 2008-05: this paper has now split into two parts:

  1. Optimal Copyright Over Time: Technological Change and the Stock of Worsk (published in RERCI, Dec 2007)
  2. Forever Minus a Day? Theory and Empirics of Optimal Copyright Term (wherein can be found an updated optimal copyright term estimate)

Original Post

How long should copyright be? Should we increase or decrease the strength of copyright during periods of rapid technological innovation? These are all questions I address in my paper entitled Forever Minus a Day? Some Theory and Empirics of Optimal Copyright, which I will be presenting at the 2007 SERCI Congress in Berlin this week.

For those who want to know more, the full abstract is below and the latest version of the paper can be downloaded from:

http://www.rufuspollock.org/economics/papers/optimal_copyright.pdf

Update: (2007-07-13) there are a set of summary slides available here:

http://www.rufuspollock.org/economics/papers/optimal_copyright_talk.pdf

Update: (2007-07-16) for those interested in republishing, redacting, or otherwise reusing the paper I should state clearly that it (and this blog) are licensed under a Creative Commons Attribution (by) license v3.0

Update: (2007-08-07) I’ve produced an updated version of the paper. This includes a variety of small corrections (typos etc) and some more substantial reworking. In particular due to the reinclusion of the ‘small’ middle term in the statement of Theorem 13 and in subsequent calculations (previously in the proof but omitted from the statement as small) optimal term has increased from 14 years to 15 years (which bears out the original assumption that the term was small but it is nice to explicitly include it). There is also a new figure (Fig 1 in the updated paper) which gives the most accurate representation of the results in the form of the probability distribution of optimal term given the parameter range being used.

Abstract

The optimal level for copyright has been a matter for extensive debate over the last decade. This paper contributes several new results on this issue divided into two parts. In the first, a parsimonious theoretical model is used to prove several novel propositions about the optimal level of protection. Specifically, we demonstrate that (a) optimal copyright falls as the costs of production go down (for example as a result of digitization) and that (b) the optimal level of copyright will, in general, fall over time. The second part of the paper focuses on the specific case of copyright term. Using a simple model we characterise optimal term as a function of a few key parameters. We estimate this function using a combination of new and existing data on recordings and books and find an optimal term of around fifteen years. This is substantially shorter than any current copyright term and implies that existing copyright terms are too long.