Indirect Copyright Infringement Liability for ISPs and The Economics of Contracts under Asymmetric Information
AbstractUnder current copyright law, Internet Service Providers (ISPs) can be found liable for the traffic on the websites that they host. While the ISPs themselves are not undertaking acts that infringe copyright, indirect liability asserts that they either contribute to, or encourage in some way, infringing activities, and thus they are liable to claims of indirect involvement by the affected copyright holders. The present paper explores indirect liability in a standard principal-agent setting, where both moral hazard (the act of monitoring) and adverse selection (differential costs of monitoring over ISPs) are present. The model considers the kinds of contracts that could be signed between the copyright holders (acting through a collective) and the ISPs (acting individually). The self-selecting, incentive compatible equilibrium is found for the feasible scenarios that may present themselves.
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Bibliographic InfoPaper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 16-2011.
Length: 18 pages
Date of creation: Oct 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-07 (All new papers)
- NEP-CTA-2011-11-07 (Contract Theory & Applications)
- NEP-CUL-2011-11-07 (Cultural Economics)
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