Economists' Topsy-Turvy View of Piracy

13 Pages Posted: 9 Jun 2005 Last revised: 21 Feb 2015

See all articles by Stan J. Liebowitz

Stan J. Liebowitz

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics

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Although it was once considered inevitable that unauthorized copying would harm copyright owners, it is now understood that this is not necessarily the case. The concept of indirect appropriability played an important role in shaping this newer understanding. In recent years, however, many economists seem to have taken the message from this new understanding too far, seeing gains to the copyright owners from unauthorized copying in every instance of copying, when in reality the instances of such gains are likely to be rather limited. The current literature on this subject, which consists mainly of theoretical models, seems to be badly out of kilter. In this paper I attempt to explain some of the problems and try to provide the outlines of what I believe to be a more balanced and nuanced view of copying. It emphasizes the importance of examining various institutional and behavioral details of individual markets, which are often overlooked by researchers.

Keywords: Copying, copyright, indirect appropriability, file sharing, piracy, peer to peer

JEL Classification: K0, L0, L5, L8

Suggested Citation

Liebowitz, Stan J., Economists' Topsy-Turvy View of Piracy. Review of Economic Research on Copyright Issues, 2005, 1, 5-17, Available at SSRN:

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