| Abstract: |
Internet, mp3 files, peer-to-peer software and digital technologies for
copying have radically modified the music sector. In this paper I present a
theoretical model, that investigates the consequences of the appearance of a
pirate low quality good (typically a mp3 file) in the music market. In this
paper I propose a model of sampling, consider the possibility that the firm
modifies its business entering into the low quality segment and investigate
the supposed conflict between the recording company, whose profit depends on
the CD sold, and the artist, whose profits depend in part on the live
performance, the demand of which can increase for the positive externality due
to the illegal download of music. |