nep-cul New Economics Papers
on Cultural Economics
Issue of 2010‒07‒10
three papers chosen by
Roberto Zanola
University of the Piemonte Orientale

  1. The Determinants of Music Piracy in a Sample of College Students By Bellemare, Marc F.; Holmberg, Andrew M.
  2. The Effect of Entertainment in Newspaper and Television News Coverage By Greiner, Tanja
  3. Fairness Ex Ante & Ex Post – The Benefits of Renegotiation in Media Markets By Christoph Engel; Michael Kurschilgen

  1. By: Bellemare, Marc F.; Holmberg, Andrew M.
    Abstract: Why do some individuals pirate digital music while others pay for it? Using data on a sample of undergraduate students, we study the determinants of music piracy by looking at whether a respondent’s last song was obtained illegally or not. In doing so, we incorporate (i) the individual-specific transactions costs that constitute the effective price of illegal music; and (ii) individual willingness to pay (WTP) for digital music, which we elicit using a simple field experiment and which we use to control for the unobserved heterogeneity of preferences between respondents. Our empirical results indicate that a respondent’s subjective probability of facing a lawsuit and her degree of morality both have a negative impact on the likelihood that her last song was obtained illegally. These results are robust whether WTP is estimated parametrically or nonparametrically. We conclude by discussing the practical implications of our findings.
    Keywords: Music Piracy; Transactions Costs; Subjective Expectations
    JEL: D23 D12 K42 K11 L86
    Date: 2010–07–03
  2. By: Greiner, Tanja
    Abstract: In this paper, we analyze the equilibrium amount of entertainment in news coverage of newspapers and television stations. We find that a shift in the inclination to read, expressed by a shift in the (psychological) distance costs, induces both media outlets to incorporate more entertaining elements in news coverage. The introduction of commercial television, however, which leads to a unilateral fall in the distance costs to the television broadcast, yields different results. It induces a negative effect on the profits of both media outlets, and increases price competition. Furthermore, the newspaper offers less while the television channel offers more entertainment. Overall, this leads to a marginalization of informational content, as the television channel gains market shares at the expense of the newspaper.
    Keywords: media economics; industrial organization; media bias; horizontal product differentiation; duopoly
    JEL: D72 L13 L82
    Date: 2010–06
  3. By: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Michael Kurschilgen (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: The market for copyrights is characterised by a highly skewed distribution of profits: very few movies, books and songs generate huge profits, whereas the great bulk barely manages to recover production cost. At the moment when the owner of intellectual property grants a licence ("ex ante"), neither party knows the true value of the traded commodity. A seemingly odd norm from German copyright law, the so-called "bestseller provision", stipulates that the seller of a licence has a legally enforceable right to a bonus in case the work ("ex post") turns out a blockbuster. We experimentally explore the effect of the provision on market prices, on the number of deals struck and on perceived fairness. Our results show that the provision leads to lower prices for copyrights. More copyrights trade. The buyers perceive less ex-post unfairness.
    Keywords: experiment, fairness, Copyright, Uncertainty
    JEL: C91 K12
    Date: 2010–06

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