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Author Dewenter, Ralf ♦ Haucap, Justus ♦ Wenzel, Tobias
Source EconStor
Content type Text
Publisher Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW)
File Format PDF
Language English
Subject Domain (in DDC) Social sciences ♦ Economics
Subject Keyword Music Industry ♦ Indirect Network Effects ♦ Salop Model ♦ File Sharing ♦ Musikwirtschaft ♦ Preis ♦ Network Externalities ♦ Internet ♦ Tausch ♦ Theorie ♦ Oligopoly and Other Imperfect Markets ♦ Entertainment; Media ♦ Cultural Economics; Economic Sociology; Economic Anthropology: General
Abstract This paper analyses the interdependency between the market for music recordings and concert tickets, assuming that there are positive indirect network effects both from the record market to ticket sales for live performances and vice versa. Using a model with two interrelated Salop circles we show that prices in both markets are corrected downwards when compared to the standard Salop model. Furthermore, we show that the effects of file sharing on firms' profitability and on variety are ambiguous. File sharing can increase profits through increased concert ticket demand and thereby also lead to additional market entry and additional variety.
Part of series IWQW Discussion Papers x09/2009
Learning Resource Type Article
Publisher Date 2009-01-01
Publisher Place Erlangen
Rights Holder