Dynamic analysis of an institutional conflict within the music industry

Oleg V. Pavlov (opavlov@wpi.edu)
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Oleg V. Pavlov: Social Science and Policy Studies WPI

No 233, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: Peer-to-peer technology has made massive music piracy possible, which, in turn, has arguably had a significant economic impact on the recording industry. Record labels have responded to online piracy with litigation and are also considering self-help measures. It is currently not obvious whether or not these counter-piracy strategies will ultimately stifle online file sharing in the long term. With this paper we attempt to add to our understanding of the conflict within the institution that is the commercial music industry. We conduct an institutional analysis of the industry in transition and extend the traditional pattern modeling methodology with a formal resource-based model of a representative online music network. The model accounts for complex causal interactions between resources, private provision of common goods, free riding and membership dynamics. The numerical implementation of the model is the basis of a decision support system, which is used in a series of computer experiments that emulate anti-piracy scenarios. We show that a peer-to-peer system may be quite resilient to outside disturbances. The experiments also demonstrate that policies rank differently in their effectiveness based on a selected yardstick.

Keywords: Peer-to-peer (P2P) networks; Online File Sharing; Copyright; Simulation (search for similar items in EconPapers)
JEL-codes: C60 H40 K40 (search for similar items in EconPapers)
Date: 2005-11-11
New Economics Papers: this item is included in nep-cse, nep-cul, nep-law, nep-mkt, nep-net and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf5:233

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