Music Product as a Durable Good and Online Piracy

Music is typical experience good and the formats in which music is available; for example, CDs and cassettes or downloaded files are durable in nature. Using these two typical characteristics of the 'music product', in this paper, we develop an analytical framework to study the economic implications of online music piracy. We show that for the legitimate music producer, protection against piracy may not always be the best option; the decision on the degree of limiting piracy depends on the extent of the informational value of music downloads and the quality of the downloaded music