On the Impact of Digital Music Distribution
Year: 2008
Type: article
Abstract: We present a framework to evaluate the impact of digital music distribution. We set up a representative model that enables the comparative static analysis. We then interpret two empirical observations about the music industry, the sales decline and the price constancy, and fit the model to these observations. We find that, while the impact of digitalization on the producers’ profits is probably negative, it may not be as severe as the observed impact on the quantity. On the other hand, the impact of digitalization on the consumer surplus is unambiguously positive. The impact on the social welfare is rather ambiguous in general, but the social welfare may increase for plausible parameter values. (JEL codes: K11, L86, O34)
Source: CESifo Economic Studies
Authors: I. Ahn, K. Yoon
Institutions: Chung-Ang University, Korea University
Language: English
Subfield: Marketing
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2135129485