The Limits of Indirect Appropriability in Markets for Copiable Goods

19 Pages Posted: 15 Jun 2008  

Justin P. Johnson

Cornell University - Samuel Curtis Johnson Graduate School of Management

Michael Waldman

Cornell University - Samuel Curtis Johnson Graduate School of Management

Abstract

An extensive literature has developed that argues that in many settings the social welfare costs of copying or piracy are limited because of the presence of indirect appropriability. Indirect appropriability is the idea that original good producers can appropriate some of the value derived by the consumers of copies because of the return that buyers of original units receive from allowing copies to be made. In this paper we discuss the limitations of indirect appropriability, where the two we focus on are the "flooding" of the copy market and substitutability between new units and copies. We also discuss the ramifications of our analysis for real world markets.

Keywords: Indirect Appropriability, Intellectual Property

Suggested Citation

Johnson, Justin P. and Waldman, Michael, The Limits of Indirect Appropriability in Markets for Copiable Goods. Review of Economic Research on Copyright Issues, Vol. 2, No. 1, pp. 19-37, 2005. Available at SSRN: https://ssrn.com/abstract=1144572

Justin P. Johnson (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

Michael Waldman

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-8631 (Phone)

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