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Vertically Related Markets of Collective Licensing of Differentiated Copyrights with Indirect Network Effects

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  • Tim Paul Thomes

    (School of Economics and Business Administration, Friedrich Schiller University Jena)

Abstract

This paper presents a theory of vertically interrelated markets of identical fixed size under implementation of positive indirect network effects. By introducing two Salop circles, a two-sided market model is provided, where intermediaries of differentiated copyrights for intellectual property, like performing rights organizations or publishers, compete as oligopsonists for owners of the intellectual property and as oligopolists for the users of their blanket licenses. We demonstrate, that an increase in competition benefits either license users or copyright owners or harms both groups. Moreover, if license users gain from an increased market entry, the owners of the intellectual property have to incur losses and vice versa.

Suggested Citation

  • Tim Paul Thomes, 2010. "Vertically Related Markets of Collective Licensing of Differentiated Copyrights with Indirect Network Effects," Jena Economics Research Papers 2010-056, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2010-056
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Vertical restraints; Indirect network effects; Copyright enforcement; Performing rights organizations; Music industry;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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