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The Decreasing Excludability of Digital Music: Implications for Copyright Law

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Listed:
  • J. J. Arias
  • Cameron Ellis

Abstract

Since the advent of the file-sharing program Napster in June of 1999, copyright infringement has plagued the recorded music industry. We review the evidence on piracy and its effect on record industry profits. We then model the behavior of file sharers and music producers under different remuneration and legal regimes using a stage game. We find that under certain conditions, the removal of copyright laws for recorded music is welfare improving. There is also a parameter space where public sector music distribution combined with a tax-payer funded subsidy of music production is welfare dominant.

Suggested Citation

  • J. J. Arias & Cameron Ellis, 2013. "The Decreasing Excludability of Digital Music: Implications for Copyright Law," The American Economist, Sage Publications, vol. 58(2), pages 124-133, November.
    • Handle: RePEc:sae:amerec:v:58:y:2013:i:2:p:124-133
    DOI: 10.1177/056943451305800205
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    References listed on IDEAS

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    1. Felix Oberholzer-Gee & Koleman Strumpf, 2007. "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 115(1), pages 1-42.
    2. Zentner, Alejandro, 2006. "Measuring the Effect of File Sharing on Music Purchases," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 63-90, April.
    3. Mortimer, Julie Holland & Nosko, Chris & Sorensen, Alan, 2012. "Supply responses to digital distribution: Recorded music and live performances," Information Economics and Policy, Elsevier, vol. 24(1), pages 3-14.
    4. Liebowitz, S J, 1985. "Copying and Indirect Appropriability: Photocopying of Journals," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 945-957, October.
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