The paper is a fun read—even for those of us who think of ourselves as fashion challenged—and I have a number of questions about it. I will focus on just one for this post and will come back to others across the course of the discussion.
Kal and Chris: could you tell us more about exactly how the copying works within the industry? At pages 5-8 of the paper, you lay out some of the key institutional features of the industry. Those include the Fall and Spring runway shows in New York, London, Milan and Paris and also the fashion pyramid, with high-fashion at the top; bridge lines beneath that; followed by better fashion and then mass-market fashion.
Later in the paper, at pages 43-44 (my printout didn’t have page numbers so around footnote 78 if you are similarly handicapped), you focus on ex ante IP incentives behind the Rawlsian veil of ignorance and describe a “stable regime of free appropriation” as plausibly flowing from the fact that as a designer “one is more likely, over time, to be a copyist than to be copied.”
Is that specific to fashion or perfectly general? If we focused on the pharmaceutical industry or movies, couldn’t we say the same thing? If only one in ten innovations succeeds, most of the time that innovation will be owned by the other guy and you would like to copy it, hence ex ante, on your analysis, is there any industry in which the innovators themselves should want a strong IP regime?
That gets me back to the texture—who could resist?—of copying. I want to focus on horizontal and vertical copying and copying over time. By horizontal copying, I mean copying at the same level of the pyramid: Dior copies Gucci or Target copies Wal-Mart. By vertical copying, I mean Target copies Dior. The claim of ex ante symmetry seems implicitly to be about horizontal copying. I assume that Target and Dior are asymmetric ex ante: Dior never expects to copy fashion design from Target, but Target may decide to copy Dior. The Rawlsian symmetry claim might work at the same level in the pyramid—though I am skeptical about that as I hope the last paragraph suggested—but I am having an especially hard time believing that it works for vertical copying.
So tell me more about how copying works and the extent to which copying is symmetric or asymmetric. I want to separate the symmetry discussion from the interesting (but I think separate) question of fad/fashion/durability incentives; I will pick up those in a later post. Start with the runway shows. I assume timing and secrecy means that if I am a high-fashion designer, I can’t copy your new designs. I could copy your old designs—do we see that across years at the runway shows?—but I don’t have the information to copy your current designs. So how does horizontal copying work at each step in the pyramid? Is most of the copying not horizontal but instead vertical?