IDEAS home Printed from https://ideas.repec.org/p/ivi/wpasad/2011-08.html
   My bibliography  Save this paper

A model of music piracy with popularity-dependent copying costs

Author

Listed:
  • Florian Schuett

    () (University of Tilburg)

  • Amedeo Piolatto

    (Universidad de Alicante)

Abstract

Anecdotal evidence and recent empirical work suggest that musicpiracy has differential effects on artists depending on their popularity.Existing theoretical literature cannot explain such differential effectssince it is exclusively concerned with single-firm models. We present amodel with two types of artists who differ in their popularity. Weassume that the consumers' costs of illegal downloads increase withthe scarcity of a recording, and that scarcity is negatively related to theartist's popularity. Moreover, we allow for a second source of revenuesfor artists apart from CD sales. These alternative revenues depend onan artist's recognition as measured by the number of consumers whoobtain his recording either by purchasing the original or downloadinga copy. Our findings for the more popular artist generalize a resultfound by Gayer and Shy (2006) who show that piracy is beneficial tothe artist when alternative revenues are important. In our model,however, this does not carry over to the less popular artist, who isoften harmed by piracy even when alternative revenues are important.We conclude that piracy tends to reduce musical variety.

Suggested Citation

  • Florian Schuett & Amedeo Piolatto, 2011. "A model of music piracy with popularity-dependent copying costs," Working Papers. Serie AD 2011-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2011-08
    as

    Download full text from publisher

    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2011-08.pdf
    File Function: Fisrt version / Primera version, 2011
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cuberes, David & Dougan, William, 2009. "How Endogenous Is Money? Evidence from a New Microeconomic Estimate," MPRA Paper 17744, University Library of Munich, Germany.
    2. Luis J. Hall, 2010. "Differentiated social interactions in the US schooling race gap," Working Papers. Serie AD 2010-17, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    3. van der Leij Marco & Goyal Sanjeev, 2011. "Strong Ties in a Small World," Review of Network Economics, De Gruyter, vol. 10(2), pages 1-22, June.
    4. Yoon, Kiho, 2002. "The optimal level of copyright protection," Information Economics and Policy, Elsevier, vol. 14(3), pages 327-348, September.
    5. Marko Terviö, 2009. "Superstars and Mediocrities: Market Failure in the Discovery of Talent -super-1," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 829-850.
    6. Sonia Oreffice & Climent Quintana, 2009. "Anthropometry and Socioeconomics in the Couple: Evidence from the PSID," Working Papers 2009-22, FEDEA.
    7. José J. Sempere Monerris & Rafael Moner Colonques & Amparo Urbano Salvador, 2010. "Trade liberalization in vertically related markets," Working Papers. Serie AD 2010-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    piracy; file sharing; heterogeneous artists.;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ivi:wpasad:2011-08. 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: (Departamento de Edición). General contact details of provider: http://edirc.repec.org/data/ievages.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.