Unintended Consequences: MPAA Eliminates Pirate Lemons

As Randall recently posted, the US has made it a felony to record films with a camcorder. Like many pieces of legislation produced without economic analysis, this is likely to have severe unintended consequences. In this case, if the ban is successful, its results will be the opposite of the law's supposed intent, as this excellent piece at bubblegeneration points out. Here's a quick summary of the argument:

There are several sources for pirated films. One is for them to be recorded in a movie theater with a camcorder. Others include copies of Academy Awards screener DVDs, official DVDs, and copies made from actual film. Of these, the camcordered versions are the lowest quality - they are the lemons of the pirate market.

When a consumer considers whether to purchase a pirated or legal copy, obviously one consideration is the expected quality of the pirated copy. In fact, this is likely to be a major factor, since lack of quality regulation is one of the downsides of the black market. By eliminating pirate lemons from the market, the MPAA is improving the average quality of a pirated movie. If price remains the same, rational consumers will respond by purchasing (or downloading) more illegally copied films.

Producing legislation without using economics is like typing at a terminal with no screen. Something is going to happen, but it may not be at all what you wanted. This is an especially bad idea when, like Congress, you have root access.

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Lessons via analogy A clever

Lessons via analogy
A clever analogy from Patri Friedman for the Slashdot crowd: Producing legislation without using economics is like typing at a terminal with no screen. Something is going to happen, but it may not be at all what you wanted. This...

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