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  • Danaher, B, M.D. Smith, R. Telang, S. Chen. 2012. The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from a Natural Experiment in France. forthcoming in Journal of Industrial Economics

  • Danaher, B., S. Dhanasobhon, M.D. Smith, R. Telang. 2010. Converting Pirates without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy. Marketing Science, 29(6) 1138-1151.

Working Papers
  • “Reel Piracy: The Effect of Internet Film Piracy on International Box Office Sales” with Joel Waldfogel.
    In this paper we ask whether filesharing on the Internet displaces ticket sales in the international box office. We use the adoption of BitTorrent – the filesharing protocol the greatly reduced file download times – as a natural experiment to capture the causal effect of piracy on sales. We further support our results with a genre analysis, under the prior that some genres are more heavily pirated than others. We find that as a lower bound, Hollywood films lost $2 billion in sales in the 2006 international box office due to filesharing, although actual losses may be larger. We note that movie studios have begun to shrink international film release windows in reaction, and we suggest that this is more important for some genres of films than for others.

  • “An Empirical Analysis of Digital Music Bundling Strategies” with Yan Huang, Michael D. Smith, and Rahul Telang.
    Digital markets have introduced complex pricing problems for music labels – for example, the iTunes music store forces sellers to unbundle their albums and also places restrictions on the prices that can be charged per song. In this paper, we use data from a unique event where record labels were allowed to increase track prices from $.99 to $1.29 on the iTunes store. We develop a structural model of consumer demand that takes into account the choice between tracks and the album, and we apply this model to a rich dataset obtained from one of the major music labels during a large scale price experiment.

    Our simulations show that tiered pricing (as opposed the traditional uniform pricing that iTunes enforced until 2009) significantly increases revenue for record companies. In addition, our simulations provides detailed pricing guidance for labels seeking to maximize profits by optimizing song and album prices for titles of different genres, popularities, and vintages.

  • “Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales” with Mike Smith.
    The growth of Internet-based piracy has caused media firms to lobby governments to implement stricter anti-piracy regulations, including shutting down major Internet sites that serve as major conduits for pirated content. In this paper we analyze the impact of one such anti-piracy intervention on digital sales of movies: the impact of the popular Megaupload site on digital sales of movies for one major studio.

    Exploiting cross-country variation in pre-shutdown usage of Megaupload, we find that the shutdown of Megaupload and its associated sites caused a significant increase in digital movie sales and rentals. Our analysis across 12 countries suggests that the shutdown caused digital revenues for one major motion picture studio to increase by $2.5 to $4.1 million during the eighteen weeks following the shutdown.

Works in Progress
  • “Will People Pay When it’s Free: The Effect of Piracy on the Own-Price Elasticity of Digital Music”.
    In this line of research, I am investigating the link between piracy and the price people are willing to pay for digital music. For example, I observe that genres with high tendencies toward piracy (such as Rap and Hip Hop) also experience very elastic demand, while genres with low tendencies toward piracy (such as Classical, Jazz, or Christian Rock) experience less elastic demand. By itself, this correlation suggests that record companies can use piracy data to inform pricing decisions for digital music. I am also exploring the possibility of a causal link, which would suggest that current studies underestimate the displacement of profits caused by piracy, as filesharing not only displace sales but also cause firms to lower prices.

  • “Systematic Biases in Privacy Decision-making” with Alessandro Acquisti
    In this line of research, my coauthor and I have designed several experiments to better understand the cognitive biases associated with peoples’ valuations of privacy. Understanding better how people make decisions regarding their privacy will allow policymakers and systems designers to assist consumers in making more socially optimal choices.