Table of Contents

Comparative Law and Economics

Comparative Law and Economics

Research Handbooks in Comparative Law series

Edited by Theodore Eisenberg and Giovanni B. Ramello

Contemporary law and economics has greatly expanded its scope of inquiry as well as its sphere of influence. The extension to many idiosyncratic topics and issues that sometime lie outside the traditional domain of the discipline have fostered the emergence of a new consciousness better grasped by a comparative approach. The original contributions to this Research Handbook provide a glimpse of the new perspectives that enrich the law and economics methodology.

Chapter 13: Copyright and tort as mirror models: On not mistaking for the right hand what the left hand is doing

Wendy J. Gordon

Subjects: economics and finance, law and economics, law - academic, comparative law, law and economics

Extract

American law schools in their Torts courses routinely teach first year students that a key to understanding the law of personal injury is ‘internalizing externalities’. That is, tort law identifies a subset of actors whose behavior is harmful and discourages such behavior by making the actors bear for some or all of the harm they cause. Without tort law, much harm would be ‘external’ to the actors’ decision-making. Once the law ‘internalizes’ to the actor the prospect of having to pay for harm he or she might cause, the actor is induced to be more careful. What is less commonly taught is the way that copyright law also depends for much of its crucial logic on ‘internalizing externalities.’ The policy logic of copyright like the policy logic of torts focuses on using internalization to produce incentives, but copyright emphasizes the harnessing of positive rather than negative externalities, that is, copyright’s focus is primarily on encouraging rather than discouraging particular activities. In copyright a primary concern is with enabling productive authors (and their employers and assigns) to collect some of the benefit their work generates in order to increase authorial incentives. I sometimes argue that copyright can be best understood as tort law turned upside down.

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