Intellectual Property and the Prisoner's Dilemma: A Game Theory Justification of Copyrights, Patents, and Trade Secrets

Abstract

Setting aside various foundational moral entanglements, I will offer an argument for the protection of intellectual property based on individual self-interest and prudence. In large part, this argument will parallel considerations that arise in a prisoner’s dilemma game. After sketching the salient features of a prisoner’s dilemma, I will briefly examine the nature of intellectual property and how one can view content creation, exclusion, and access as a prisoner’s dilemma. In brief, allowing content to be unprotected in terms of free access leads to a sub-optimal outcome where creation and innovation are suppressed. Finally, I will argue that adopting the institutions of copyright, patent, and trade secret is one way we can avoid these sub-optimal results.

Keywords: Intellectual Property, Prisoner's Dilemma, Iterated Prisoner's Dilemma, Copyright, Patent, Trade Secret, Guild Guilds, Tit-For-Tat, Tragedy of the Commons, Silk Road