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Piracy and Copyright Enforcement Mechanisms

In: Innovation Policy and the Economy, Volume 14

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  • Brett Danaher
  • Michael D. Smith
  • Rahul Telang

Abstract

Much debate exists around the impact that illegal file sharing may have on the creative industries. Similarly, opinions differ regarding whether the producers of artistic works should be forced to accept any weakening of intellectual property rights resulting from illegal file sharing, or if governments should intervene to protect these rights. This chapter seeks to inform these questions by outlining what we do and do not know from existing academic research. We first discuss whether filesharing displaces sales of media goods and then discuss whether such displacement will lead to reduced incentives to produce new creative works. We continue by summarizing recent findings on what businesses can do to compete with piracy and the effectiveness of anti-piracy interventions on encouraging consumers to migrate from illegal to legal consumption channels. We conclude by demonstrating that without additional empirical evidence, it will be difficult to determine the socially optimal set of strategies and government copyright policies in the digital era.

(This abstract was borrowed from another version of this item.)

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This chapter was published in:

  • Josh Lerner & Scott Stern, 2014. "Innovation Policy and the Economy, Volume 14," NBER Books, National Bureau of Economic Research, Inc, number lern13-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12945.

    Handle: RePEc:nbr:nberch:12945

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    References

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    1. Zentner, Alejandro, 2006. "Measuring the Effect of File Sharing on Music Purchases," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 49(1), pages 63-90, April.
    2. Sudip Bhattacharjee & Ram D. Gopal & Kaveepan Lertwachara & James R. Marsden & Rahul Telang, 2007. "The Effect of Digital Sharing Technologies on Music Markets: A Survival Analysis of Albums on Ranking Charts," Management Science, INFORMS, INFORMS, vol. 53(9), pages 1359-1374, September.
    3. Michael Smith & Erik Brynjolfsson, 1999. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Computing in Economics and Finance 1999, Society for Computational Economics 1022, Society for Computational Economics.
    4. Julie Holland Mortimer & Chris Nosko & Alan Sorensen, 2010. "Supply Responses to Digital Distribution: Recorded Music and Live Performances," NBER Working Papers 16507, National Bureau of Economic Research, Inc.
    5. Arthur Vany & W. Walls, 2007. "Estimating the Effects of Movie Piracy on Box-office Revenue," Review of Industrial Organization, Springer, Springer, vol. 30(4), pages 291-301, June.
    6. Takeyama, Lisa N, 1994. "The Welfare Implications of Unauthorized Reproduction of Intellectual Property in the Presence of Demand Network Externalities," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 42(2), pages 155-66, June.
    7. Adermon, Adrian & Liang, Che-Yuan, 2010. "Piracy, Music, and Movies: A Natural Experiment," Working Paper Series, Center for Fiscal Studies 2010:13, Uppsala University, Department of Economics.
    8. Il-Horn Hann & Christian Terwiesch, 2003. "Measuring the Frictional Costs of Online Transactions: The Case of a Name-Your-Own-Price Channel," Management Science, INFORMS, INFORMS, vol. 49(11), pages 1563-1579, November.
    9. Joel Waldfogel, 2007. ""Lost" on the Web: Does Web Distribution Stimulate or Depress Television Viewing?," NBER Working Papers 13497, National Bureau of Economic Research, Inc.
    10. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2010. "Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy," Marketing Science, INFORMS, INFORMS, vol. 29(6), pages 1138-1151, 11-12.
    11. repec:reg:wpaper:576 is not listed on IDEAS
    12. Birgitte Andersen & Marion Frenz, 2010. "Don’t blame the P2P file-sharers: the impact of free music downloads on the purchase of music CDs in Canada," Journal of Evolutionary Economics, Springer, Springer, vol. 20(5), pages 715-740, October.
    13. Waldfogel, Joel, 2010. "Music file sharing and sales displacement in the iTunes era," Information Economics and Policy, Elsevier, Elsevier, vol. 22(4), pages 306-314, December.
    14. Bhattacharjee, Sudip & Gopal, Ram D & Lertwachara, Kaveepan & Marsden, James R, 2006. "Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 49(1), pages 91-114, April.
    15. Joel Waldfogel, 2011. "Bye, Bye, Miss American Pie? The Supply of New Recorded Music Since Napster," NBER Working Papers 16882, National Bureau of Economic Research, Inc.
    16. Liebowitz, S J, 1985. "Copying and Indirect Appropriability: Photocopying of Journals," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 93(5), pages 945-57, October.
    17. Stan J. Liebowitz & Alejandro Zentner, 2012. "Clash of the Titans: Does Internet use Reduce Television Viewing?," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 234-245, February.
    18. Liebowitz, Stan J, 2006. "File Sharing: Creative Destruction or Just Plain Destruction?," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 49(1), pages 1-28, April.
    19. Smith, Michael D. & Telang, Rahul, 2010. "Piracy or promotion? The impact of broadband Internet penetration on DVD sales," Information Economics and Policy, Elsevier, Elsevier, vol. 22(4), pages 289-298, December.
    20. Kathleen Reavis Conner & Richard P. Rumelt, 1991. "Software Piracy: An Analysis of Protection Strategies," Management Science, INFORMS, INFORMS, vol. 37(2), pages 125-139, February.
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    Cited by:
    1. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2014. "Understanding Media Markets in the Digital Age: Economics and Methodology," NBER Chapters, in: Economics of Digitization National Bureau of Economic Research, Inc.
    2. Susan Athey & Scott Stern, 2013. "The Nature and Incidence of Software Piracy: Evidence from Windows," NBER Working Papers 19755, National Bureau of Economic Research, Inc.
    3. Markus Pasche, 2014. "Welfare Effects of Endogenous Copyright Enforcement - the Case of Digital Goods," Jena Economic Research Papers 2014-008, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
    4. Michael Arnold & Eric Darmon & Sylvain Dejean & Thierry Penard, 2014. "Graduated Response Policy and the Behavior of Digital Pirates: Evidence from the French Three-Strike (Hadopi) Law," Working Papers, University of Delaware, Department of Economics 14-07, University of Delaware, Department of Economics.
    5. Dalton, John & Leung, Tin Cheuk, 2013. "Strategic Decision-Making in Hollywood Release Gaps," MPRA Paper 52439, University Library of Munich, Germany.

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