2005b) Economists’ topsy-turvy view of piracy

Abstract. Although it was once considered inevitable that unauthorized co-pying would harm copyright owners, it is now understood that this is not necessarily the case. The concept of indirect appropriability played an impor-tant role in shaping this newer understanding. In recent years, however, many economists seem to have taken the message from this new understanding too far, seeing gains to the copyright owners from unauthorized copying in every nook and cranny of the economy, when in reality the instances of such gains are likely to be rather limited. The current literature on this subject, which consists mainly of theoretical models, seems to be badly out of kilter. In this paper I attempt to explain some of the problems and try to provide the out-lines of what I believe to be a more balanced and nuanced view of copying. It emphasizes the importance of examining various institutional and behavioral details of individual markets, which are often overlooked by researchers. The term ‘pirate ’ has historically been associated with the activities of stealing and plundering on the high seas. Perhaps because the concept of sea pirates ha