A Guide for Students and Teachers
Edited by Richard Watt
Chapter 4: The fair use doctrine: markets, market failure and rights of use
Markets are most acceptable when they serve efficiency and other goals. It is only under transaction-costless conditions of perfect knowledge, flawless and cost-free enforcement, full monetization, and instantaneous ability to organize and negotiate, that markets are guaranteed to generate efficient outcomes. And even then, markets could fall short as social tools, because goals other than allocative efficiency may fail to be met. However, neither the real-world inaccessibility of ‘perfect’ market conditions nor the importance of non-monetizable social goals requires us to jettison the use of markets. To decide if markets should be used, they need to be compared with their institutional alternatives, and all institutions are imperfect. In addition, there are ways to improve markets’ functioning. One device for improving their functioning is to create exceptions (in appropriate circumstances) to the property rules on which the troublesome markets rest. A substantial economic literature discusses the nature that these exceptions can take, in particular, the comparative merits of rules versus standards. Rules are hard-edged and definite, easily known in advance. Standards are open-textured, their applicability decided upon as cases arise, and their results harder to predict.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.