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For industries ranging from software to pharmaceuticals and entertainment, is an intense debate about the appropriate level of for intellectual property. The Internet provides a natural to assess the implications of reduced protection because it lowers the cost of copying information. In this paper, we whether file sharing has reduced the legal sales of music. While question is receiving considerable attention in academia, industry, Congress, we are the first to study the phenomenon employing on actual downloads of music files. We match an extensive sample downloads to U. S. sales data for a large number of albums. To causality, we instrument for downloads using data on international holidays. Downloads have an effect on sales that is indistinguishable from zero. Our estimates are inconsistent would like to thank Bharat Anand, Gary Becker, Bob Frank, Shane Greenstein, Goolsbee, Alan Krueger, Steven Levitt, Tom Mroz, Alan Sorensen, Joel Waldfogel, Wildman, Pai-Ling Yin, participants at numerous seminars, and two anonymous for helpful comments. This project would not have been possible without the of several individuals and organizations. MixMasterFlame and the FlameNap shared P2P data with us, and BigChampagne LLC, the CMJ Network, Nathaniel, and Nevil Brownlee generously provided auxiliary data. We thank Keith Ross David Weekly for assistance in understanding the KaZaA, OpenNap, and WinMX protocols and database indices. Sarah Woolverton and Christina Hsiung Chen superb research assistance. The financial support of the George F. Baker Foundation (Oberholzer-Gee) and the Kenan Faculty Fund (Strumpf) is gratefully acknowledged. appreciated the aural support from Massive Attack, Sigur Ros, and the Mountain.
Oberholzer‐Gee et al. (Thu,) studied this question.