The (Over-)Optimism of Creators
Conventional thinking about innovation and creativity relies on the concept of a rational innovator. Indeed, an ideal version of the rational innovator is the basis for our patent and copyright laws, which are meant to spur creative effort and bring us more great new inventions and artistic works. Patent and copyright work by giving property rights to creators. But property rights are not valuable in the abstract. They are useful only if the underlying creative work—the novel, the film, the computer software, the new drug—are valuable. If a creator's work is worth money, then having the exclusive right to offer it for sale or license—which is what copyright and patent give to authors and inventors—is a very nice thing indeed.
Whether this system makes sense depends on the validity of the assumption of one crucial underlying assumption. Do creators act rationally? Our law assumes that innovators calculate, either explicitly or implicitly, the cost of creation versus the size of the return they will likely enjoy. A writer might anticipate a certain advance from her publisher; a musician might estimate the sales of a new song. This expected return shapes how much effort they pour into creation and what kinds of creation they pursue. Abundant research in economics and psychology, however, suggest that their judgments are often likely to be wrong—and systematically so.