Abstract

In this paper, I model the economic effects of copyright regulation on the artists' incentives to produce music. Copyright raises its holder's market power by granting an exclusive right of use, sale, and distribution on the artistic work covered. This protection is thought to solve a market failure, trading off static consumers' welfare for dynamic incentives to invest in cultural production: the advent of the Internet and the rapid digitization of all forms of communications and entertainment are modifying this trade-off. The literature has assumed so far that the incentives to invest in a cultural product are proportional to the expected profit of the producer. This has generally been done by defining a quality variable, q, which is an increasing function of the producer's profits: the more profitable the cultural product, the more the artist will be willing to "invest" in quality. I partially move away from this framework by inserting complementarity between digital songs and live concerts. Copyright regulation then becomes a way to trade off revenues from digital sales with revenues from live concerts and find the policy that maximizes total revenues.

Abstract

On many online platforms, sellers offer products with additional fees and features. Platforms often deliberately shroud these fees from consumers. Examples are shipping fees, luggage fees on flight-aggregator websites, or resort fees and upgrades on hotel booking platforms. We explore the incentives of two-sided platforms to disclose additional fees and design a transparent marketplace when consumers might naively ignore shrouded additional fees. First, we find that platforms have stronger incentives to shroud additional fees than sellers in the absence of platforms. This result holds for monopoly platforms and in some competitive settings. Second, competition might induce platforms to regulate additional fees, which benefits consumers. We discuss connections to frequent practices like drip pricing, and platforms like Amazon or eBay regulating shipping fees. 

Abstract

This article studies incentives for a premium provider (Superstar) to offer exclusive contracts to competing platforms mediating the interactions between consumers and firms. When platform competition is intense, more consumers affiliate with the platform favored by Superstar's exclusive deal. This mechanism is self-reinforcing as more firms follow consumer decisions and some singlehome on the favored platform creating more exclusivity in the market. Exclusivity always benefits firms and might be welfare-enhancing. A vertical merger (platform-Superstar) makes non-exclusivity more likely than if the Superstar was independent. The analysis provides novel insights for policymakers and it is robust to several variations and extensions.

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