Digital products can be copied almost at no cost and are subject to non-commercial copying by fin... more Digital products can be copied almost at no cost and are subject to non-commercial copying by final consumers. Because the copy of a copy typically does not deteriorate in quality, copies can become available on a large scale basis -this can be illustrated by the surge of file-sharing networks. In this paper we provide a critical overview of the theoretical literature that addresses the economic consequences of end-user copying. We analyze basic models of piracy, models with indirect appropriation, models with network effects, and models with asymmetric information. We discuss the applicability of the different modeling strategies to a number of industries such as software, video and computer games, music, and movies.
This paper develops a simple model of piracy to analyze its effects on prices and welfare and to ... more This paper develops a simple model of piracy to analyze its effects on prices and welfare and to study the optimal enforcement policy. A monopolist produces an information good (involving a "large" development cost and a "small" reproduction cost) that is sold to two groups of consumers differing in their valuation of the good. We distinguish two settings: one in which the monopoly is regulated and one in which it maximizes profits and is not regulated, except that the public authority may be responsible for the control of piracy. We show that copying or piracy might be welfare enhancing because it is a way to "provide" the good to some individuals (those with a low willingness to pay) without undermining the firm's ability to finance the development cost via the pricing scheme applied to high valuation consumers. The level of piracy control differs according to the regulatory environment. Three levels of piracy control emerge. The highest is the one chosen by the private monopoly. The next level is the one chosen by the regulated monopoly. The lowest, that can be zero, is the level of control chosen by the public authority when the good is sold (and priced) by a private monopoly.
... The studio commissioned download study estimates that there were 750,330 peer-to-peerdownload... more ... The studio commissioned download study estimates that there were 750,330 peer-to-peerdownloads of the movie, 50 FTP downloads and 1,386 IRC downloads. Usenet downloads are estimated to be 240,000. So, there were about 1 million downloads. ...
... [2] Herschel C. Burstyn, “International patent WO 01/33846 : Method and apparatus for film an... more ... [2] Herschel C. Burstyn, “International patent WO 01/33846 : Method and apparatus for film anti-piracy,” 2001. ... 2, pp. 1413–1421, 1993. [18] LT Sharpe, A. Stockman, H. Jägle, H. Knau, G. Klausen, A. Reitner, and J. Nathans, “Red, green, and red-green hybrid photopigments in ...
Digital products can be copied almost at no cost and are subject to non-commercial copying by fin... more Digital products can be copied almost at no cost and are subject to non-commercial copying by final consumers. Because the copy of a copy typically does not deteriorate in quality, copies can become available on a large scale basis -this can be illustrated by the surge of file-sharing networks. In this paper we provide a critical overview of the theoretical literature that addresses the economic consequences of end-user copying. We analyze basic models of piracy, models with indirect appropriation, models with network effects, and models with asymmetric information. We discuss the applicability of the different modeling strategies to a number of industries such as software, video and computer games, music, and movies.
This paper develops a simple model of piracy to analyze its effects on prices and welfare and to ... more This paper develops a simple model of piracy to analyze its effects on prices and welfare and to study the optimal enforcement policy. A monopolist produces an information good (involving a "large" development cost and a "small" reproduction cost) that is sold to two groups of consumers differing in their valuation of the good. We distinguish two settings: one in which the monopoly is regulated and one in which it maximizes profits and is not regulated, except that the public authority may be responsible for the control of piracy. We show that copying or piracy might be welfare enhancing because it is a way to "provide" the good to some individuals (those with a low willingness to pay) without undermining the firm's ability to finance the development cost via the pricing scheme applied to high valuation consumers. The level of piracy control differs according to the regulatory environment. Three levels of piracy control emerge. The highest is the one chosen by the private monopoly. The next level is the one chosen by the regulated monopoly. The lowest, that can be zero, is the level of control chosen by the public authority when the good is sold (and priced) by a private monopoly.
... The studio commissioned download study estimates that there were 750,330 peer-to-peerdownload... more ... The studio commissioned download study estimates that there were 750,330 peer-to-peerdownloads of the movie, 50 FTP downloads and 1,386 IRC downloads. Usenet downloads are estimated to be 240,000. So, there were about 1 million downloads. ...
... [2] Herschel C. Burstyn, “International patent WO 01/33846 : Method and apparatus for film an... more ... [2] Herschel C. Burstyn, “International patent WO 01/33846 : Method and apparatus for film anti-piracy,” 2001. ... 2, pp. 1413–1421, 1993. [18] LT Sharpe, A. Stockman, H. Jägle, H. Knau, G. Klausen, A. Reitner, and J. Nathans, “Red, green, and red-green hybrid photopigments in ...
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