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Buccafusco & Sprigman on Endowment Effects & Intellectual Property

By Lawrence Solum

Christopher J. Buccafusco (Chicago-Kent College of Law) & Christopher Jon Sprigman (University of Virginia School of Law) have posted Valuing Intellectual Property: An Experiment on SSRN. Here is the abstract:

In this article we report on the results of an experiment we performed to determine whether transactions in intellectual property (IP) are subject to the valuation anomalies commonly referred to as ?endowment effects?. Traditional conceptions of the value of IP rely on assumptions about human rationality derived from classical economics. The law assumes that when people make decisions about buying, selling, and licensing IP they do so with fixed, context-independent preferences. Over the past several decades, this rational actor model of classical economics has come under attack by behavioral data showing that people do not always make strictly rational decisions. Perhaps the most important research in this field is that related to the ?endowment effect? ? the discovery that, contrary to economic predictions, people value the same object more when they own it than when they do not.

Cool paper. Recommended.

Full post as published by Legal Theory Blog on March 16, 2010 (boomark / email).