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Music piracy: A case of “The Rich Get Richer and the Poor Get Poorer”

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  • Piolatto, Amedeo
  • Schuett, Florian

Abstract

There is evidence that music piracy has differential effects on artists depending on their popularity. We present a model of music piracy with endogenous copying costs: consumers’ costs of illegal downloads increase with the scarcity of a recording and are therefore negatively related to the number of originals sold. Allowing for a second source of revenues apart from record sales, we show that piracy can hurt some artists while benefiting others. Under plausible assumptions, piracy is beneficial to the most popular artists. However, this does not carry over to less popular artists, who are often harmed by piracy. We conclude that piracy tends to reduce musical variety.

Suggested Citation

  • Piolatto, Amedeo & Schuett, Florian, 2012. "Music piracy: A case of “The Rich Get Richer and the Poor Get Poorer”," Information Economics and Policy, Elsevier, vol. 24(1), pages 30-39.
  • Handle: RePEc:eee:iepoli:v:24:y:2012:i:1:p:30-39 DOI: 10.1016/j.infoecopol.2012.01.002
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    References listed on IDEAS

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    Cited by:

    1. Eric Darmon & Alexandra Rufini & Dominique Torre, 2014. "Publisher's Announcements and Piracy-Monitoring Devices in Software Adoption," Annals of Economics and Statistics, GENES, issue 115-116, pages 409-430.
    2. Inceoglu, Firat, 2015. "Copyright protection and entry deterrence," Information Economics and Policy, Elsevier, pages 38-45.

    More about this item

    Keywords

    L82; K42; Piracy; File sharing; BitTorrent; Endogenous download costs;

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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