User Account

All Pages

What is the new expected cost of peer-to-peer file sharing

Assignment Help International Economics
Reference no: EM13238919

Now consider what has happened in the market for illegal downloads. As the article suggests, lawsuits brought by the Recording Industry Association of America (RIAA) seem to have raised the cost most users attribute to illegal downloads.

Before these lawsuits, many users assumed there was essentially no risk that they would be prosecuted for sharing music. After the RIAA brought hundreds of high-profile lawsuits against users and settled with several users for fines in the thousands of dollars, many users apparently decided there was a cost associated with the risk of a lawsuit.

Economists can measure this kind of cost as an "expected cost." The expected cost of engaging in an illegal activity equals the cost you pay if you are caught times the probability that you will be caught. For example, suppose 10,000,000 people share music files and the RIAA randomly sues 10 of these people. If you share music files, your probability of being sued is 1 in 1,000,000. Suppose that if you are sued, you will pay a $10,000 fine. In this case, your expected cost of sharing files is $10,000 times the probability of being sued, or $10,000 times (1 divided by 1,000,000), which equals $0.01.

Now suppose that the number of RIAA lawsuits increases to 10,000. What is the new expected cost of peer-to-peer file sharing?

Reference no: EM13238919

Questions Cloud

Hungary uprising against the soviet-union : Which book is said to have played an important role in the Hungary uprising against the Soviet-Union?
Explain pure olive oil has an iodine value : Pure olive oil has an iodine value of about 85. A very old sample or originally pure olive oil is found to have an iodine value of 55. Explain
What is the resistance of the resistor : A capacitor that is initially uncharged is connected in series with a resistor and a 406.7V emf source with negligible internal resistance, What is the resistance of the resistor
Leaf modifications occurs : Which of the following leaf modifications occurs/occur in desert areas to inhibit water loss?
What is the new expected cost of peer-to-peer file sharing : Now consider what has happened in the market for illegal downloads. As the article suggests, lawsuits brought by the Recording Industry Association of America (RIAA) seem to have raised the cost most users attribute to illegal downloads.
Compute the theoretical amount of oxygen : 10 g potassium chlorate is decomposed producing oxygen gas and potassium chloride: 2KClO3 + heat -> 2KCl + 3O2. The actual yield of oxygen measures 3.915576 g. Calculate the theoretical amount of oxygen based on your starting mass of reactant.
What is orbital velocity of satellite : A satellite orbits at a distance from the Earth's center of about 4.80 Earth radii and takes 14.8 hours to go around once, What is its orbital velocity
Do given percentage change in full cost of illegal download : Since September the RIAA has filed hundreds of lawsuits against music pirates, claiming "egregious" copyright infringement and seeking up to $150,000 per violation. Many defendants have settled out of court for up to $10,000.
What is altitude of satellite : A 125 kg satellite experiences a gravitational force by the Earth of 790 N, What is altitude of satellite and What is the radius of the satellite's orbit

Reviews

Write a Review

International Economics Questions & Answers

  What will happen to the price paid by us consumers

The equilibluim of the French cost per pound would be $20 per pound and the pounds of lobster would be 700 This gives a good opportunity to sell to the fishermans and they would be better off. If they would sell more lobster at a higher price the ..

  What would be effect the price of gas in the us

in US, gas cost 2.5 per gallon. in italy, gas cost 6 per gallon. what effect dose this price differential likely  have on a.the size of cars in us and italy b. the use of public transportation the us and italy c.the fuel efficiency of cars in the us ..

  Impact of exchange rate on exports

Suppose that a country's real growth is 2% a year, while its real deficit is rising 5% per year. Can the country continue to afford such deficit indefinitely?

  Determine the foreign earnings of us multinational companies

The economic staff of the U.S. Department of the Treasury has been asked to recommend a new tax policy concerning the treatment of the foreign earnings of U.S. firms. Currently the foreign earnings of U.S. multinational companies are taxed only.

  Optimal organizational structure

What is PM firm's optimal organizational structure? How does it impact PM firm's international market expansion plans? How would it change as PM firm adopts additional international market expansion strategies?

  Describe the leontief paradox

Suppose If factor-intensity reversals were indeed prevalent in the real world, how might this fact be used to describe the Leontief paradox?

  When will china catche the u.s. in total output

In 2006, U.S. output was $14 trillion and Chinese output was $3 trillion. Suppose that from now on, the output of China grows at an annual rate of 9% per year, while the output of the U.S. grows at an annual rate of 3.5% per year. a. How many year..

  Determine exchange rate between euro and british pound

Assume the United State dollar price of a British pound is $1.50; dollar price of a euro is $1; a hotel room in London, England, costs 120 British pounds;

  What is the expected inflation rate in the united states

Suppose that the exchange rate adjusts so that interest-rate parity holds. Suppose also that the interest rate on a one-year German bond is 7% and the interest rate on a one-year U.S. bond is 4%. Suppose that you expect the exchange rate in one yea..

  How many do wholesalers buy from u.s. growers

Wholesalers of roses (the firms that supply your local flower shop with roses for Valentine's Day) buy and sell roses in containers that hold 120 stems. The table provides information about the wholesale market for roses in the United States.

  calculate the series for nominal gdp

Calculate and Plot using a spreadsheet (like Ms Excel) the series for Nominal GDP

  How the federal govt balance its budget annually

Some politicians have suggested that the U.S. enact a constitutional amendment requiring that the federal govt balance its budget annually. Explain why such an amendment, if strickly enforced, would force the govt to enact a contractionary fiscal ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd