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The Computer Generation's Willingness to Pay for Originals when Pirates are Present – A CV study

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Author Info
Holm, Håkan () (Department of Economics, Lund University)
Abstract

A contingent valuation method is applied to study subjects' willingness to pay for originals when illegal copies are freely available. The subjects consisted of 234 Swedish undergraduate students from the "computer generation". Only 2% of the "normal" (and 0% of the "elite") students were willing to pay the retail price for the original. However, the majority was prepared to pay a non-negligible amount for the original. Demand curves and profit maximizing behaviors are analyzed. The price elasticity of piracy indicates that piracy is insensitive to price cuts. The results have implications for the calculation of damages of piracy.

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File URL: http://swopec.hhs.se/lunewp/papers/lunewp2000_009.pdf
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Publisher Info
Paper provided by Lund University, Department of Economics in its series Working Papers with number 2000:9.

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Length: 23 pages
Date of creation: 27 Sep 2000
Date of revision: 01 Nov 2000
Handle: RePEc:hhs:lunewp:2000_009

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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/
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Related research
Keywords: Piracy; Contingent Valuation; Damages; Software;

Find related papers by JEL classification:
D40 - Microeconomics - - Market Structure and Pricing - - - General
K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
Z10 - Other Special Topics - - Cultural Economics - - - General

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References listed on IDEAS
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  1. Bakos, Yannis & Brynjolfsson, Erik & Lichtman, Douglas, 1999. "Shared Information Goods," Journal of Law & Economics, University of Chicago Press, vol. 42(1), pages 117-55, April.
  2. Takeyama, Lisa N, 1997. "The Intertemporal Consequences of Unauthorized Reproduction of Intellectual Property," Journal of Law & Economics, University of Chicago Press, vol. 40(2), pages 511-22, October.
  3. Takeyama, Lisa N, 1994. "The Welfare Implications of Unauthorized Reproduction of Intellectual Property in the Presence of Demand Network Externalities," Journal of Industrial Economics, Blackwell Publishing, vol. 42(2), pages 155-66, June. [Downloadable!] (restricted)
  4. Besen, Stanley M., 1986. "Private copying, reproduction costs, and the supply of intellectual property," Information Economics and Policy, Elsevier, vol. 2(1), pages 5-22. [Downloadable!] (restricted)
  5. Diamond, Peter A & Hausman, Jerry A, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall. [Downloadable!] (restricted)
  6. Liebowitz, S J, 1985. "Copying and Indirect Appropriability: Photocopying of Journals," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 945-57, October. [Downloadable!] (restricted)
  7. Hanemann, W Michael, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall. [Downloadable!] (restricted)
  8. Portney, Paul R, 1994. "The Contingent Valuation Debate: Why Economists Should Care," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 3-17, Fall. [Downloadable!] (restricted)
  9. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 158-74, February. [Downloadable!] (restricted)
  10. Novos, Ian E & Waldman, Michael, 1984. "The Effects of Increased Copyright Protection: An Analytic Approach," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 236-46, April. [Downloadable!] (restricted)
  11. Besen, Stanley M & Kirby, Sheila Nataraj, 1989. "Private Copying, Appropriability, and Optimal Copying Royalties," Journal of Law & Economics, University of Chicago Press, vol. 32(2), pages 255-80, October.
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