Paper Draft: Napster Good? Welfare Economics Analysis of Music Infringement

I previously suggested that music copyright might be inefficient, because it prevents uses with a positive social welfare value and no social welfare cost. I've now expanded that idea into a paper, using public quotes about the level of filesharing to try to estimate its positive and negative effects:



In this drawing, the smaller checked rectangle represents the potential social welfare cost of filesharing, and the dotted triangle represents the social welfare gains from filesharing. As you can see, it's very possible that the gains outweigh the losses. (In fact, the balance is even more one-sided, because the gain recaptures what would otherwise be a pure deadweight loss, while the "loss" is actually a wealth transfer.)

To see how I got there, check out the paper here. (The footnotes are sparse and badly formatted at this point -- if anyone has pointers for stuff that should be in there, or other suggestions, I'd appreciate it.)