| dc.description.abstract | For industries ranging from software to pharmaceuticals and entertainment,
there is an intense debate about the appropriate level of
protection for intellectual property. The Internet provides a natural
crucible to assess the implications of reduced protection because it
drastically lowers the cost of copying information. In this paper, we
analyze whether file sharing has reduced the legal sales of music. While
this question is receiving considerable attention in academia, industry,
and Congress, we are the first to study the phenomenon employing
data on actual downloads of music files.We match an extensive sample
of downloads to U.S. sales data for a large number of albums. To
establish causality, we instrument for downloads using data on international
school holidays. Downloads have an effect on sales that is
statistically indistinguishable from zero. Our estimates are inconsistent
We would like to thank Bharat Anand, Gary Becker, Bob Frank, Shane Greenstein,
Austan Goolsbee, Alan Krueger, Steven Levitt, Tom Mroz, Alan Sorensen, Joel Waldfogel,
Steven Wildman, Pai-Ling Yin, participants at numerous seminars, and two anonymous
referees for helpful comments. This project would not have been possible without the
assistance of several individuals and organizations. MixMasterFlame and the FlameNap
network shared P2P data with us, and BigChampagne LLC, the CMJ Network, Nathaniel
Leibowitz, and Nevil Brownlee generously provided auxiliary data. We thank Keith Ross
and David Weekly for assistance in understanding the KaZaA, OpenNap, and WinMX
search protocols and database indices. Sarah Woolverton and Christina Hsiung Chen
provided superb research assistance. The financial support of the George F. Baker Foundation
(Oberholzer-Gee) and the Kenan Faculty Fund (Strumpf) is gratefully acknowledged.
We appreciated the aural support from Massive Attack, Sigur Ros, and the Mountain
Goats. | |
