Academic journal article
By Stoup, Phillip
Duke Law Journal , Vol. 58, No. 2
This Note analyzes the development and efficacy of social norms in maximizing the welfare of participants in the virtual community of Second Life. Although some of these norms developed appropriately in response to the objectives and purposes of this virtual world, Second Life is so thoroughly steeped in conditions that have impeded the development of successful social norms in other communities that any system of social norms in Second Life will ultimately fail. Because social norms will likely fail to successfully maximize resident welfare, regulatory schemes imposed both by the operators of the virtual world and by real-world governing institutions are needed to enhance the functioning of this particular alternative reality inhabited by millions.
Beliefs lawyers hold about computers, and predictions they make about new technology, are highly likely to be false, This should make us hesitate to prescribe legal adaptations for cyberspace. The blind are not good trailblazers. (1)
Despite Judge Frank Easterbrook's admonition, for over two decades lawyers and legal scholars have debated the role, presence, and effect of real-world regulations on the internet and property in cyberspace. For ease of understanding, this ongoing debate can be divided into two opposing viewpoints on how real-world legal rules and regulations should affect the internet and virtual property: first, a camp of "exceptionalists" who believe that cyberspace is fundamentally distinct from the real world and thus should be subject to a different set of rules, and second, a camp of "unexceptionalists" who believe that cyberspace is no different from the real world and should be governed by the same regulations."
Out of this debate between the exceptionalists and the unexceptionalists emerged a middle ground: the theory of "Code is Law" recognizes both the validity of cyberspace as a distinct world regulated by the computer code that defines it, (3) and the theory acknowledges a need for some level of real-world regulations to protect the virtual world from infractions its regulating computer code cannot prevent. (4) This theory, formulated primarily by Professor Lawrence Lessig, can be further illustrated by analogizing the balance between computer code and real-world law to a farmer installing fences around a field. (5) There, the fencing operates like the computer code: it stops potential intruders from accessing the farmer's land by making access to the land impossible where the fence bars the way. Like computer code that can be hacked or manipulated, however, a trespasser can climb over the fence or cut through its barbed wire. Therefore, society needs laws and rules like the tort of trespass to protect further the farmer's land when the fence fails. (6) In cyberspace this interplay between computer code-created rules and real-world regulation presents two questions, which are further explored in this Note. First, if there is to be a mix between code-created rules and real-world regulations, what is the optimal combination? And second, if code-created rules are to at least partially govern the internet and cyberspace, who is best positioned to create these new governing laws? (7)
The optimal mix between code-created rules and real-world regulations could be determined by finding the "mix that provides optimal protection at the lowest cost." s Put differently, the determination of what norms ought to be used in cyberspace should be guided by the consideration of what norms will maximize the participants' welfare. (9) This economic-minded analysis is not a call for a uniform set of norms to be applied to the internet as a whole. (10) Instead, whatever norms that a society employs must necessarily be highly tailored to the context in which they are applied. Therefore, the first step in determining what norms should be used is to ascertain the potential objectives of the cyberspace being regulated. …