Peer-to-peer Networks and Complementary Goods: The Impact of Openness and Innovation on Profitable Piracy
File-sharing is often depicted as detrimental to traditional commercial activities and tends to dissuade official digital goods’ producers from innovating. Meanwhile, evidence shows that producers are likely to provide complementary hardware goods that are compatible with digital goods available both offline and online. This article investigates to what extent the introduction of peer-to-peer networks has a positive impact on the level of profits reached by producers. Our model shows that the file-sharing activity does not crowd the official digital goods producers and hardware goods producers out of the market. Moreover, we find that there exists suitable quality-based strategies so that both types of producers benefit from the file-sharing activity. The utility that peer-to-peer networks provide to file-sharers has to be considered cautiously for commercial firms to gain positive outcomes from the file-sharing activity.
Volume (Year): 44 (2011)
Issue (Month): 1-2 ()
|Contact details of provider:|| Postal: 12 Zmaj Jovina St, 11000 Belgrade, Serbia|
Phone: +381 11 2622 357, 2623-055
Fax: +381 11 2181 471
Web page: http://www.ien.bg.ac.rs
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ibg:eajour:v:44:y:2011:i:1-2:p:15-37. 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: (Zorica Bozic)
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.