Abstract

http://ssrn.com/abstract=829544
 
 

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Why the Music Industry May Gain from Free Downloading - the Role of Sampling


Martin Peitz


University of Mannheim - Department of Economics

Patrick Waelbroeck


Telecom ParisTech

October 2005

International University in Germany Working Paper No. 41/2005

Abstract:     
Downloading digital products for free may harm creators and intermediaries because consumers may no longer buy the version for sale. However, as we show in this paper, this negative effect may be overcompensated by a positive effect due to sampling: consumers are willing to pay more because the match between product characteristics and buyers' tastes are improved. This indeed holds under sufficient taste heterogeneity and product diversity.

Number of Pages in PDF File: 12

Keywords: file-sharing, P2P, sampling, information transmission, piracy, music

JEL Classification: L11, L82

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Date posted: November 2, 2005  

Suggested Citation

Peitz, Martin and Waelbroeck, Patrick, Why the Music Industry May Gain from Free Downloading - the Role of Sampling (October 2005). International University in Germany Working Paper No. 41/2005. Available at SSRN: http://ssrn.com/abstract=829544 or http://dx.doi.org/10.2139/ssrn.829544

Contact Information

Martin Peitz (Contact Author)
University of Mannheim - Department of Economics ( email )
D-68131 Mannheim
Germany
+49 621 181-1835 (Phone)
HOME PAGE: http://peitz.vwl.uni-mannheim.de/
Patrick Waelbroeck
Telecom ParisTech ( email )
46 rue Barrault
F-75634 Paris, Cedex 13
France
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