The Society for Economic Research on Copyright Issues

Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

Should We Put Them in Jail? Copyright Infringement, Penalties and Consumer Behaviour: Insights from Experimental Data

Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 81-95, 2004

Anna Maffioletti and Giovanni Battista Ramello

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Abstract

The purpose of this paper is to deepen the knowledge of consumer behaviour in information goods markets, taking as a reference the sound recording market. In particular, its aim is twofold: on the one hand it attempts to get new insights on consumers paying special attention to their willingness to pay and to purchasing behaviour; on the other hand it wants to find out whether the recently adopted increase in legal measures against consumers by industries can have positive effects on lowering copyright infringement and raising legal demand. Using experimental methods, we elicited individual preferences in legal and burned CDs. We used hypothetical as well as real choices. Our experimental results suggest that lawsuits can effectively lower the rate of copying because they raise the probability of being caught by consumers and thus punished. However, they do not necessarily raise legal sales since the measured consumer willingness to pay is generally lower than the market price for legal products. Consequently, increased copyright enforcement may only lead to demand withholding.

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A Comment: The 'Copyright Factors'

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 71-78, 2004

Richard Watt

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Abstract

In this paper, I have suggested the possibility of a simple calculation that returns a lower bound on the total contribution of copyright to GDP, once the groupings between the core, and unrelated activities has been made, but independently of the exact weights that should be assigned to the activities that are not in either of these two groups (i.e. those that remain in the related group). On the other hand, in order to do this it was necessary to take a particular definition of exactly what particular activities should be included in the related group (activities that, without having a copyright factor of 1, are on average at least as dependent upon copyright as is the economy as a whole). Thus, with a relatively low level of effort, one can get what appears to be quite an accurate, but still only intended as a rough estimate, answer to the question of exactly what is the total contribution of copyright to GDP.

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When Should the Bell Toll? The Economics of New Zealand's Debate on Indirect Liability for Internet Copyright Infringement

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 119-149, 2004

Alan E. Woodfield

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Abstract

This article evaluates proposed changes to New Zealand's copyright legislation in respect of potential secondary liability for copyright infringement by Internet service providers. Minor changes were envisaged in order to align the legislation with new international standards, with limitation of ISP liability along the lines of the UK Electronic Commerce Regulations 2002 recommended. Both zero liability and strict liability for web-hosting ISPs are correctly rejected, but the proposed uniform regulatory approach provides limited incentives for ISP monitoring effort and while proposed knowledge-based standards should largely prevent excessive permanent removal of legitimate material, the constructive knowledge test may be insufficient to encourage the removal of many infringing items. The counter-notification procedure may not prevent liability-conscious ISPs from removing excessive legitimate material on a temporary basis, and more radical solutions involving ISP purchase of their subscribers' posted material or compulsory ISP purchase of copyrights did not feature. The design of optimal copyright law is fraught with difficulties, however, and the Ministry's consultative processes and careful deliberations have done much to maintain a reasonable balance between the conflicting interests concerned.

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Some Challenges for Copyright-Related Quantification

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 41-50, 2004

Jeremy Thorpe

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Abstract

Drawing on personal experience, this note outlines a number of the methodological challenges that exist when trying to provide some quantification of the economic impacts and contributions related to copyright law and policy (See The Allen Consulting Group, 2003a, The Allen Consulting Group,2001, and The Allen Consulting Group, 2003b).

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Enforcement Sharing and Commercial Piracy

Review of Economic Research on Copyright Issues, Vol. 3, No.1, 83-97, 2006

Dyuti S. Banerjee

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Abstract

This paper uses a strategic entry-deterrence framework to analyze the effects of enforcement sharing between the government and the monopolist in dealing with commercial copyright piracy. The monopolist is the incumbent firm and is responsible for monitoring the illegal operations of a commercial pirate, the possible entrant, who illegally reproduces and sells unauthorized copies of the monopolist's product. The monopolist bears the monitoring cost and the government is responsible for setting a penalty. We show that even when enforcement is shared the socially optimal penalty may result in no piracy in equilibrium only if the government is sensitive to piracy.

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Intellectual Property: How the Right to Keep it to Yourself Can Facilitate Dissemination

Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 17-23, 2005

William J. Baumol

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Abstract

The fundamental conflict in the goals of intellectual property (IP) policy is the apparent incompatibility of protection of the creator and ease of dissemination. Copyrights and patents seem to favor the first goal and conflict with the second, but patents have actually helped to resolve the conflict by transforming the IP into a tradable commodity. As a result, many patent proprietors actively promote use of their IP by others, even direct competitors. Patent licensing is a major revenue source for many firms. Patent pools institutionalize remunerative sharing of IP. Even from their medieval beginnings, patents were used to encourage dissemination and they continue to serve that purpose directly via disclosure requirements. So, perhaps with some redesign and innovative usage, copyrights can help to reconcile the two apparently conflicting goals - provision of incentives for both creative activity and widespread use of its products.

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Optimal Copyright Over Time: Technological Change and the Stock of Works

Review of Economic Research on Copyright Issues, Vol. 4, No. 2, 51-64, 2007

Rufus Pollock

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Abstract

The optimal level for copyright has been a matter for extensive debate over the last decade. Using a parsimonious theoretical model this paper contributes several new results of relevance to this debate. In particular we demonstrate that (a) optimal copyright is likely to fall as the production costs of 'originals' decline (for example as a result of digitization) (b) technological change which reduces costs of production may imply an increase or a decrease in optimal levels of protection (this contrasts with a large number of commentators, particularly in the copyright industries, who have argued that such change necessitates increases in protection) (c) the optimal level of copyright will, in general, fall over time as the stock of work increases.

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Europe's Lost Royalty Opportunity: A Comparison of Potential and Existing Digital Music Royalty Markets in Ten Different EU States

Review of Economic Research on Copyright Issues, 11(2), 60-91, 2014

Roya Ghafele

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Abstract

A comparison of existing online revenues collected from digital music licenses and the potential royalty market for online music, suggests an inadequate royalty market capture within the European Union. An estimate of the 2012 market for digital music royalties in ten different E.U. countries indicates this market could have been well over €18 billion. However, only €116 million were reported by corresponding Collective Rights Management Organizations in that same year. The three largest digital music royalty markets (U.K., Germany and France) comprise around €11 billion. Yet, the corresponding Collective Rights Management Organizations (PRS for Music, SACEM and GEMA) generate only €95 million in royalty revenue from all online media. The gap between existing and potential royalties is tremendous and suggests that E.U. Member States have not come to grips yet with the internet. Their existing business models, paired with a regulatory environment rooted in the 19th century rationale of the Berne Convention has not been supportive of grasping the opportunities provided by a disruptive technology. By consequence, artists do not receive the royalties they deserve, commercial users are exposed to prohibitive license fees and non-commercial users suffer from adequate legal alternatives to digital piracy.

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Accounting for Creativity: Lessons from the Economic History of Intellectual Property and Innovation

Review of Economic Research on Copyright Issues, 2020, vol. 17(1), pp. 1-37

B. Zorina Khan

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Abstract

Social progress depends on the realization of inventive ideas, and economic history provides valuable lessons about creativity in technology and culture. The empirical study of over one hundred thousand innovative individuals who obtained patents, copyrights, and prizes, sheds light on the relationship between institutions, incentives, and transformative ideas and expression, over the past two centuries. The European growth model assumed useful knowledge was scarce, and top-down administered innovation systems offered rights and rewards to "exclusive" groups. By contrast, American policies regarded creativity as widely distributed in the general population, and further promoted "inclusive" market-oriented mechanisms that fostered diversity in ideas and outcomes. The evidence suggests that property rights in patents facilitated markets in ideas, and ensured that returns were aligned with productivity and market demand. Whereas, such administered systems as innovation prizes and publisher's copyrights in the "creative industries" benefited the few rather than overall social welfare.

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Visual Artists' Resale Royalty: An Application of the Principal and Agent Model

Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 37-43, 2008

Maryam Dilmaghani

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Abstract

The visual artist's resale royalty right entitles an artist to a percentage of the price received by subsequent owners when her works are resold. Adopted by the integrity of EU countries in 2006, the question of the Federal recognition of this right in the US is currently discussed. Economic analysis of this right mostly concluded its inefficiency. In this paper we examine the issue from the stand point of incentives provided by each legal framework, with and without this right, for the artists. We argue that an optimal mechanism designed to implement a maximum level artistic effort in the society coincides with the adoption of this right.

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The Effects of the Berne Convention on Translations in the Netherlands

Review of Economic Research on Copyright Issues, 11(1), 9-31, 2014

Leo Fankhanel

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Abstract

The Berne Convention was the first attempt to recognise the copyright of foreign authors and their translations. I create a unique dataset to analyse the long run effects of the Berne Convention in 1912 in the Netherlands. Using pre-post statistical analysis and regression discontinuity design I find a significant decrease in the number of books translated per capita and an increase in translations per author.

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The Limits of Indirect Appropriability in Markets for Copiable Goods

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 19-37, 2005

Justin P. Johnson and Michael Waldman

Downloads:  505


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.

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Indirect Appropriability 20 Years on

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 1-4, 2005

Richard Watt

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Abstract

20 years ago, Stan Liebowitz's famous paper on indirect appropriability was published in the Journal of Political Economy. At the time, it would surely have been impossible to predict the impact that the paper, together with two or three others published in the same journal at around the same time, would have on the fledgling area of economics that was being re-born under the label of "the economics of copyright."

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In Search of a Methodology to Assess the Copyright Industries in Developing Countries: The Experience of Mercosur and Chile

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 2004

Antonio M. Buainain

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Abstract

The object of this paper is to present the methodology and key findings of a study entitled The Economic Importance of the Industries & Activities Protected by Copyright or Related Intellectual Property Rights in the Mercosur Countries Plus Chile, which may be useful as a basis for similar research in other developing countries. It should be noted that this is not an academic study designed to investigate hypotheses on the dynamics and role of the copyright industries or the role of intellectual property and related rights in the formation and evolution of the copyright industries. The purpose of the study is more modest. Its authors set out to describe the copyright industries in general terms and measure their importance in income formation, job creation and trade in the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) plus Chile. The study was commissioned by the World Intellectual Property Organization (WIPO) and the Mercosur countries plus Chile, which were interested in assessing the economic importance of the copyright industries in those countries.

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Guest Editor's Introduction

Review of Economic Research on Copyright Issues, Vol. 4, No. 2, 1-3, 2007

Christian W. Handke

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Abstract

The Society of Economic Research on Copyright Issues (SERCI) Annual Congress 2007 was hosted by the Centre for British Studies at Humboldt University Berlin. The congress was fully subscribed with well over 90 registered participants from 18 different countries. It attracted 48 academic researchers who presented 27 papers, four of which make up this special issue of the Review of Economic Research on Copyright Issues. The SERCI Annual Congress 2007 also featured a special session on the economics of copyright collecting societies. This session proved particularly interesting to policy-makers and practitioners and triggered a diverse debate.

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