Pricing and pirate product market formation

Explores the relationship between legitimate product pricing, copyright law enforcement and the formation of black markets for pirate products. The analytical framework is illustrated using the market for sound recordings as a case study. Investigates copyright owner strategies to combat piracy, including price discounting to establish a legitimate market and lobbying for increased enforcement and infringement penalties. An elementary regression model is employed to examine the empirical relationship between legitimate sound recording price, black market distribution channels and piracy. The empirical model supports the hypotheses that piracy is directly related to legitimate price and the size of black markets.