By Brett Danaher, Michael D. Smith and Rahul Telang
February 2, 2016
How can you determine the truth about the impact of piracy on sales? Economic theory is inconclusive on this question. You can make a perfectly valid theoretical argument that in most cases piracy will hurt legal sales (after all, when something is available for free it is generally harder to convince people to pay for it). But you can also make a perfectly valid theoretical argument that piracy will have no effect on legal sales, or could even cause legal sales to increase (because of increased awareness for the content or artist). So what should you do when the theory is inconclusive? Study the data, of course.