François Moreau

The Music Industry in the Digital Era: Toward New Contracts

Digital piracy, although negatively altering the recorded music market, has a positive impact on other segments of the music market, such as live music or ancillary goods, because it generates a positive externality benefiting those activities. Through a 2-player strategic game between a record company and an artist, this study shows that a renegotiation of music contracts could allow the internalizing of this positive externality, while being welfare-improving for both record companies and artists. This study also shows, however, that pervasive piracy is not desirable for an artist.

Internet and the ‘Long Tail versus superstar effect’ debate: evidence from the French book market

From a comprehensive database of monthly sales of comic books and literature books in France over the period 2003 to 2007, we show that (i) bestsellers got smaller market shares online than offline, contrary to medium- and low-sellers; (ii) both online and offline sales shift from the head of the distribution to the tail with increasing magnitude over the period; and (iii) the Long Tail appears to be more than just a short-lived phenomenon caused by the specific preferences of early adopters of e-commerce. These three results suggest that online information and distribution tools, whose use increased over the period 2003 to 2007, do have an impact on book distribution and on consumers purchase decisions.

Interaction between public policies and technological competition under environmental risks

This paper examines the interaction between two random processes: (1) a process of technological competition among several mature polluting technologies and a new technology which is environmentally friendly, but the cost of which depends on the adoption rate; (2) a random process of learning about the environmental impact of technologies by the public policy maker who may decide, according to the results, on taxation or prohibition of certain technologies. The ability of the public authorities to ensure the survival of the most environmentally friendly technology is analyzed. The role of various parameters is discussed, especially the interaction between the choice of risk thresholds which determine the intervention of public authorities (i.e. the implementation of the precaution principle) and the policy maker’s learning rate for environmental risks (i.e. the speed with which beliefs in risks regarding the most recent research results are adjusted). Some paradoxical effects arising from the implementation of the precaution principle on the survival of the most environmentally friendly technology are pointed out. The model illustrates problems encountered in practice like the choice of the European Union policy in the face of NOx emissions from cars.

Cognitive Efficiency of Social Networks Providing Consumption Advice on Experience Goods

This Chapter deals with the issue of cognitive efficiency on the Internet. Cognitive efficiency refers here to the creation of chatrooms that gather individuals with homogenous preferences (but unable to recognize each other in the “real world”) and that provide relevant consumption advice on experience goods. Hence, we raise the question of the ability for individuals initially scattered on the Net to meet in homogenous chatrooms (according to taste and consumption decisions) in order to ensure informational relevance. We show that, in the simple model we propose, cognitive efficiency depends on (i) individuals’ preference patterns (especially on relative utilities between the various varieties of goods), (ii) on their requirement concerning the quality of advice they receive, and, though not specifically modelized, (iii) on the entry process in chatrooms (simultaneous or sequential, with or without mimetic behavior).