Professors Stan Liebowitz and Steven Margolis, who have done fine work on the intricacies of network issues and the Microsoft case, have published an analysis of the amicus brief filed by a pack of economists in Eldred v. Ashcroft (last year's Supreme Court decision on the extension of copyright terms).
Their conclusion: "There are important aspects of the economics of copyright that were ignored or not fully considered by the Eldred economists. They overlook factors, such as the elasticity of supply of creative works, which might reverse their conclusion about the impact of copyright extension on the creation of new works. They neglect the possibility of network effects in the market for derivative works that might make a copyright commons uneconomic, independent of any impact on supply. Finally, they avoid the difficult empirical work that would be needed to provide an answer to the question they entertain."
Read it: Seventeen Famous Economists Weigh in on Copyright: The Role of Theory, Empirics and Network Effects (AEI-Brookings Joint Center for Regulatory Studies, January 2004).
It is a nervy piece, considering that the brief was signed by some of the true big-foots of the profession, but it is also an important one. I admit to an interest here; I was feeling lonely because of my criticism of the economists' brief in a PFF paper last year, Intellectual Property in the Internet Age: The Meaning of Eldred (see pages 13-15), and I am happy to have company, especially because my lawyer-based treatment lacks the elegance of Liebowitz and Margolis.