Digital Technology and the Allocation of Ownership in the Music Industry

We apply the property rights theory of Grossman-Hart-Moore in the music industry and study the optimal allocation of copyright between the artists who create music and the labels who promote and distribute it. Digital technology opens up a role for new intermediaries. We find that entry of online platforms occurs only if they are sufficiently more productive in distribution than the incumbent label. Furthermore, entry leads to a change in bargaining positions and it can become optimal for the copyright to be shifted from the label to the artist. (Updated from working paper 04/096)property rights theory, copyright, internet, music industry

Mixing Private and Public Service Providers and Specialization

We analyze the reform of public sector welfare services such as education. In this paper we compare a mix of private and a public service provider with full privatization. In both cases the suppliers specialize in serving particular customer types. In the mixed institution the government sets the public fee such that service quality does not deteriorate and the price of the private supplier is anchored at comparatively low level. Under full privatization, however, prices escalate to the highest possible level. As a consequence, consumer welfare is higher with a mixed institution – unless the proportion of low-cost customers is high. The mixed institution can also accommodate wealth constraints of customers to some extent.private and public suppliers, specialization, welfare services, mixed institutions

Reputation and Ownership of Public Goods

This paper analyzes the effect of reputation on ownership of public goods in the Besley and Ghatak (2001) model. We show that in the dynamic setup the optimal ownership depends not only on the relative valuations for the public good but also on technology (elasticity of investment). We also show that joint ownership of public good can be optimal in both the static and repeated game but it emerges for a different parameter range. Our results are applied to the case of return of cultural goods to their country of origin.public goods, property rights, reputation, joint ownership, cultural goods

Digital Technology and the Allocation of Ownership in the Music Industry

This paper analyses the innovation process of music goods from an organisational point of view and the effects of digital technology on the allocation of property rights. We apply the property rights theory framework introduced by Grossman-Hart-Moore (GHM) to the music industry and study the contractual relationship between artists who create music and labels who promote and distribute it. In the spirit of GHM, different types of ownership structures are analysed. The result confirms the current allocation of property rights as it suggests that music labels, whose role in the production process is indispensable due to their promotion and distribution knowledge, should own the copyright. However as digital technology advances further, alternative ways to promote and distribute music develop - labels become less indispensable. We find scenarios where the incumbent ownership structure ceases to be optimal. Moreover, we discuss new organisational structures of the music industry. We introduce a mentor, an alternative intermediary to the label and analyse its effect on the optimal allocation of ownership. Our main result is that label ownership becomes less likely.property rights theory, copyright, internet, music industry

Coordination failure in foreign aid

The author analyzes the allocation of foreign aid to various sectors in a recipient developing country. Donors tend to favor social sectors over other public expenditure programs. Due to incomplete information, donors may concentrate too much on priority sectors, leaving lower-priority yet important sectors lacking funds. Alternatively there may be gaps in services in priority areas because of the information problem. The author finds that the more similar preferences the donors have, the more scope there is for coordination failure. Therefore improving information is particularly important when the parties have similar priorities. A joint database on planned projects and budget allocations in each recipient country would provide such information. The author's point is that such databases should have both information on current projects and forward-looking information on the planned activities needed to improve aid coordination. She also analyzes the aid fungibility problem in an incomplete information setting and finds that incomplete information reduces the fungibility problem. On the other hand, incomplete information introduces coordination failure and the allocation can be inferior for both the recipient and the donor.Environmental Economics&Policies,Public Health Promotion,Health Monitoring&Evaluation,Economic Adjustment and Lending,Agricultural Knowledge&Information Systems,Economic Adjustment and Lending,Environmental Economics&Policies,Health Monitoring&Evaluation,Health Economics&Finance,Agricultural Knowledge&Information Systems

Digital technology and the allocation of ownership in the music Industry

We apply the property rights theory of Grossman-Hart-Moore in the music industry and study the optimal allocation of copyright between the artists who create music and the labels who promote and distribute it. Digital technology opens up a role for new intermediaries. We find that entry of online platforms occurs only if they are sufficiently more productive in distribution than the incumbent label. Furthermore, entry leads to a change in bargaining positions and it can become optimal for the copyright to be shifted from the label to the artist