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Peer-to-peer file sharing and cultural trade protectionism

Author

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  • Hervas-Drane, Andres
  • Noam, Eli

Abstract

We examine the Internet’s impact on the cross-border distribution of cultural goods and assess its implications for cultural policy and cultural diversity. We present a stylized model of a two-country economy where governments are endowed with political preferences over the consumption of domestic content and enact import barriers and subsidies to protect it. We introduce peer-to-peer file sharing as a distinct distribution channel enabled by the Internet that provides access to all media products at a low cost. We report two main findings. First, the Internet renders legacy cultural policy inefficient, and the elimination of import barriers and the reduction of subsidized production can be desirable even when governments exhibit paternalistic preferences favoring the consumption of domestic content. And second, even though the Internet increases cultural diversity within countries, it can also reduce diversity across them.

Suggested Citation

  • Hervas-Drane, Andres & Noam, Eli, 2017. "Peer-to-peer file sharing and cultural trade protectionism," Information Economics and Policy, Elsevier, vol. 41(C), pages 15-27.
  • Handle: RePEc:eee:iepoli:v:41:y:2017:i:c:p:15-27
    DOI: 10.1016/j.infoecopol.2017.08.002
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    Cited by:

    1. Tobias Kretschmer & Christian Peukert, 2020. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," Information Systems Research, INFORMS, vol. 31(3), pages 776-800, September.

    More about this item

    Keywords

    Media industry; Digital distribution; Cultural policy; Cultural diversity;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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