Peitz and Waelbroeck (2006b)

From Copyright EVIDENCE

Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education Libraries, archives, museums and other cultural activities

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing Video game publishing Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Peitz and Waelbroeck (2006b)
Title: Piracy of Digital Products: A Critical Review of the Theoretical Literature
Author(s): Peitz, M., Waelbroeck, P.
Year: 2006
Citation: Peitz, M, and Waelbroeck, P. (2006). Piracy of Digital Products: A Critical Review of the Theoretical Literature. Information Economics and Policy, 18(4), 449–76.
Link(s): Open Access
Key Related Studies:
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About the Data
Data Description: The study consists of a literature review of economic models of end-user copying.
Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
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Cross Country Study?: No
Comparative Study?: No
Literature review?: Yes
Government or policy study?: No
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Abstract

“Digital products can be copied almost at no cost and are subject to non-commercial copying by final consumers. Because the copy of a copy typically does not deteriorate in quality, copies can become available on a large scale basis - this can be illustrated by the surge of file-sharing networks. In this paper we provide a critical overview of the theoretical literature that addresses the economic consequences of end-user copying. We analyze basic models of piracy, models with indirect appropriation, models with network effects, and models with asymmetric information. We discuss the applicability of the different modeling strategies to a number of industries such as software, video and computer games, music, and movies.”

Main Results of the Study

The effects of end-user copying are industry dependent. Whilst most models assume that end-user copying results in firms decreasing prices, and thus losing profit, network effects may in fact lead to increased profit. The study finds that in 3 out of 4 of the industry-types surveyed, those industries benefit from the existence of digital copies of their works.It is less clear to what extent the availability of digital copies increases overall welfare. The conclusion suggests that balance is needed between limiting distribution of digital copies and exploiting the benefits of network effects. This may involve refraining from anti-piracy measures in certain markets (e.g. experience goods) and actively encouraging end-user copying.

Policy Implications as Stated By Author

The study concludes that many open policy questions remain on the subject of end-user copying (including e.g. the optimal level of copyright protection, mechanisms which improve welfare etc.). In future, researchers should look to studying alternative (industry-specific) business models which may avoid the negative effects of copying (e.g. limited time distribution, sampling, product differentiation etc.).


Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Green-tick.png
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Green-tick.png
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

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