The Economics of Copyright - Protecting Creative Activity against Music Piracy

Sammanfattning: The chronic problem of music piracy is inevitable with the utilisation of the internet. Music, being classified as information good, makes the consumer to “free-ride” and sub-optimal production of these goods is likely to happen. Copyright is an instrument in helping the continuity of creative activity. The essence of copyright law is also to protect the interests and rights of the writers, producers and artists and to impede the criminal behaviour of consumers. Since the new Swedish copyright law will take into effect the summer of 2005, the economic implication and importance of this change is investigated. The aim of this work is to evaluate from an economic point of view the effect of the new copyright law mainly on how individuals will behave in terms of their consumption of legal and illegal music. Based on the applicable theories, the stricter copyright law will deter the individuals to behave illegally. The empirical result might not have fully shown that the individuals in this investigation are more deterred with the more stringent copyright law. But this might be because of both controllable and uncontrollable factors that are of great concern for the empirical result.