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The Law and Economics of Information Overload Externalities Frank Pasquale Environmental laws are designed to reduce negative externalities (such as pollution) that harm the natural environment. Copyright law should adjust the rights of content creators in order to compensate for the ways they reduce the usefulness of the information environment as a whole. Every new work created contributes to the store of expression, but also makes it more difficult to find whatever work one wants. “Search costs” have been well-documented in information economics. Copyright law should take information overload externalities like search costs into account in its treatment of alleged copyright infringers whose work merely attempts to index, organize, categorize, or review works by providing small samples of them. They are not “free riding” off the labor of copyrightholders, but rather are creating the types of navigational tools and filters that help consumers make sense of the ocean of expression copyrightholders have created. By modeling information overload as an externality imposed by copyrighted works, this article attempts to provide a new economic justification for more favorable copyright treatment of categorizers, indexers, and reviewers. Information overload is an unintended negative consequence of copyright law’s success in incentivizing the production and distribution of expression. If courts grant content owners the right to veto categorizers’ efforts to make sense of given fields of expression, they will only exacerbate the problem. Designed to promote the “progress of the arts and sciences,” copyright doctrine should privilege the efforts of those who make that progress accessible and understandable. Categorizers fill both those vital roles. The Law and Economics of Information Overload Externalities Frank Pasquale I. Introduction 3 II. The Dilemmas of Categorizers 12 A. Case Study: The Google Print Project 15 B. Indeterminate Legal Anal