Abstract
ABSTRACT In this Article, we explore a central problem facing creative industries: how to organize collaborative creative production. We argue that informal rules are a significant and pervasive--but nonetheless underappreciated--tool for solving the problem. While existing literature has focused on how informal rules sustain incentives for producing creative work, we demonstrate how such rules can facilitate and organize collaboration in the creative space. We also suggest that informal rules can be a better fit for creative organization than formal law. On the one side, unique features of creativity, especially high uncertainty and low veriflability, lead to organizational challenges that formal law cannot easily address, as demonstrated by recent high profile cases like Garcia v. Google, Inc. On the other side, certain informal rules can meet these challenges and facilitate organization. These informal rules, functioning through mechanisms like reputation and trust, can sustain organizational solutions without a manager, a hierarchical firm, or formal allocation of control rights. In addition to showing how informal rules can work without (much) formal law, we also sketch out the dynamics involved in more complex cases where informal rules function alongside formal law in organizing collaborative creativity. Table of Contents Introduction I. Connecting Theories of Informal Rules to Theories of Organization A. Encouraging Creative Production B. Organizing Creative Production II. The Problem of Creative Collaboration and the Shortcomings of Formal Law A. The Challenges of Creative Collaboration B. The Role of Managers C. Why Formal Law Is Ineffective in Organizing Collaboration III. Mechanisms for Enforcing Informal Rules A. How Managers Can Use Reputation and Trust 1. Reputation 2. Trust 3. The Costs of Reputation and Trust B. The Special Case of Creative Collaboration Managed by External Informal Rules IV. Practical Implications of Formal Law and Informal Rules for Creative Collaborations A. When Informal Rules Fail: Garcia and Merkin B. When Informal Rules Work 1. Anecdotes from Industry Participants 2. Reputation Networks and Agents as Reputation Intermediaries C. Conflicts Between Formal Law and Informal Rules D. Crowding Out and the Cliff of Formal Law Conclusion INTRODUCTION Creative production regularly requires the combination of multiple inputs. A film, for example, will combine writing, acting, set design, costume production, editing, and the like. These creative inputs must be organized, and that organization includes decisions over who controls the inputs and the final output. This raises our central question: how is collaborative creative production organized? Recent high profile cases, like Garcia v. Google, Inc. (1) and 16 Casa Duse, LLC u. Merkin, (2) highlight the challenge of answering this question. Both cases grappled with the question of how much control an input provider had over the use of a specific input, and thus over the end product that contained the input. (3) The opinions in these cases raised more questions than they answered regarding what it means to be an author for purposes of copyright law, what it means to control a creative work, and even what makes a particular work creative. (4) The hypothesis we explore in this Article is that a complex set of informal rules, operating through mechanisms like reputation and trust, regulates the behavior of creative collaborators throughout the creative industries. (5) These collaborations feature unobservable and unverifiable inputs producing nonallocable and uncertain outputs that formal law is ill equipped to regulate. (6) When disputes arise, courts force rigid concepts from formal copyright law onto the flexible and messy reality of creative collaboration. …