The Human Side of Cyber Property Rights: Theory and Evidence from Github
Abstract: Open access is a defining feature of cyberspace that challenges the conventional wisdom on property rights. This paper presents a case where property rights may lead to the failure of the commons in cyberspace. We consider a game theoretic model of competing creations in which a freelance creator decides whether to choose open access in the shadow of a threat of litigation from the copyright holder, and competition between open access and its proprietary alternative allows a continuum of users to choose between voluntary contributions or royalty payment. When individuals are heterogeneous in social preference, the model exhibits two distinct equilibria: a reproduction equilibrium and an original contribution equilibrium. Copyright law can dramatically change the set of equilibria. Enforcing authorized use without considerable limitations on the owner's exclusive rights may erode the original contribution equilibrium completely. The key predictions of the model are then tested and supported by data from Github. A takedown notice has a persistent negative effect on subsequent sharing, and repositories shared by foreign users attract fewer contributions as their home countries improve upon software piracy prevention. Our findings caution against a secure property rights system in cyberspace.
