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Entrepreneurships, the New Economy and Public Policy pp 137–162Cite as

On the macroeconomic effects of establishing tradability in weak property rights

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Abstract

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.

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Author information

Authors and Affiliations

  1. Royal Technical University, 10044, Stockholm, Sweden

    Gunnar Eliasson

  2. Center for Law, Economics and Financial Institutions and Department of Finance, Copenhagen Business School, 2000, Frederiksberg, Denmark

    Clas Wihlborg

Authors
  1. Gunnar Eliasson
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  2. Clas Wihlborg
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Editor information

Editors and Affiliations

  1. Faculty of Economics and Business Administration Chair for Microeconomics, Friedrich-Schiller-University of Jena, Carl-Zeiss-Str. 3, 07743, Jena, Germany

    Uwe Cantner

  2. Department of Economics, University of Florida, Gainesville, FL, 32611, USA

    Elias Dinopoulos

  3. Graduate School of Business, University of Florida, 201 Bryan Hall, Gainesville, FL, 32611-7150, USA

    Robert F. Lanzillotti

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Eliasson, G., Wihlborg, C. (2005). On the macroeconomic effects of establishing tradability in weak property rights. In: Cantner, U., Dinopoulos, E., Lanzillotti, R.F. (eds) Entrepreneurships, the New Economy and Public Policy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-26994-0_9

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