Advanced Search
MyIDEAS: Login to save this paper or follow this series

Piracy on the internet: Accommodate it or fight it? A dynamic approach

Contents:

Author Info

  • Herings P. Jean-Jacques
  • Peeters Ronald
  • Yang Michael S.

    (METEOR)

Abstract

This paper uses a dynamic stochastic model to solve for the optimal pricing policy of themusic recording companies in the presence of P2P file-sharing networks eroding their CDsales. We employ a policy iteration algorithm on a discretized state space to numericallycompute the optimal price policy. The realistically calibrated model reflects the real-worldfigures we observe and provides estimates of figures we can not observe, such as changesin total welfare. The results suggest that, thanks to the existence of P2P networks, totalwelfare in 2008 in the U.S. is about $25.6 billion more per annum than in 1999 before P2Pwas introduced. Moreover, the results predict that the current trend of decreasing CDsales will continue until around the year 2020 when it will stabilize at around 231.2 millioncopies per year, comparing to the industry all-time high of 938.9 million in 1999. Thecomparative static analysis shows that full enforcement of intellectual property rights,although helpful for the industrial profit, may have adverse effect on total welfare.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://edocs.ub.unimaas.nl/loader/file.asp?id=1436
Download Restriction: no

Bibliographic Info

Paper provided by Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 034.

as in new window
Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:unm:umamet:2009034

Contact details of provider:
Postal: P.O. Box 616, 6200 MD Maastricht
Phone: +31 (0)43 38 83 830
Email:
Web page: http://www.maastrichtuniversity.nl/
More information through EDIRC

Related research

Keywords: microeconomics ;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Economides, Nicholas, 1996. "The economics of networks," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 14(6), pages 673-699, October.
  2. Bae, Sang Hoo & Choi, Jay Pil, 2006. "A model of piracy," Information Economics and Policy, Elsevier, Elsevier, vol. 18(3), pages 303-320, September.
  3. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 93(1), pages 158-74, February.
  4. Jean-Jacques Herings, P. & Peeters, Ronald & Yang, Michael S., 2010. "Competition against peer-to-peer networks," Information Economics and Policy, Elsevier, Elsevier, vol. 22(4), pages 315-331, December.
  5. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262100711, December.
  6. Markovich, Sarit, 2008. "Snowball: A dynamic oligopoly model with indirect network effects," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 32(3), pages 909-938, March.
  7. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(4), pages 822-41, August.
  8. Gayer, Amit & Shy, Oz, 2003. "Internet and peer-to-peer distributions in markets for digital products," Economics Letters, Elsevier, Elsevier, vol. 81(2), pages 197-203, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Waters, James, 2013. "Pricing information goods with piracy and heterogeneous consumers," MPRA Paper 46918, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:unm:umamet:2009034. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charles Bollen).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.