The authors argue that the fashion sector has more innovation because of its near-absence of copyright protection. Here is some brief background on the issue. Fashion is a status good. You wear a new design if some other people do (it must be focal as an object of status), but not if too many other people do. You want some degree of exclusivity to your wardrobe. So let’s say a new design comes out. There will be some early adopters, but then a rapid series of rip-offs from other companies. Once the rip-offs come, companies invest in making further designs. Fashion is ephemeral and the rip-offs spur the next round of innovation. (BTW, here is an economic model of innovation in the fashion sector, and here are some common-sense critiques…)
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