Piracy and P2P file-sharing networks : an economic analysis

M.S. Yang

Research output: ThesisDoctoral ThesisInternal

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We find that the producers of digital goods suffer not as much from piracy as the consumers benefit from it. The society as a whole benefits from piracy. A consumer’s surplus is the value of the consumption of a product minus the price, and the producer's surplus is the price minus costs (roughly speaking, profit). The total welfare is then the sum of all consumers’ and producer’s surplus (value minus costs).
It may be welfare decreasing if authorities overemphasize the protection of intellectual property rights. Comparing year 2003 to 1999, according to our estimates, the American music industry suffered from a $1.6 billion forgone annual profit. Total annual welfare increased by $13.1 billion. In 2008, annual profit has dropped by another $1.4 billion, while annual welfare soared by another $12.4 billion. By 2020, annual welfare will have improved by a whopping $29.7 billion since 1999.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Maastricht University
  • Herings, Jean-Jacques, Supervisor
  • Peeters, Ronald, Co-Supervisor
Award date24 Nov 2010
Place of PublicationMaastricht
Publication statusPublished - 1 Jan 2010


  • digital goods
  • piracy

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