The benefits in question were the incentive given to a company. These were the benefits I meant to address, to show that they could still be addressed and make others better off. With perfect information—because it is just to illustrate the situation, not suggest a proposal—we know who would pay what amount to whomever. Then we “make” them pay the profit amount, and eliminate the copyright. (How do we do it? Magic. It’s a hypothetical.) Disney has its money, the users valuing the product have the product, and then others have the product. So if at least one person would buy the DVD at the reduced copy-able price rather than not purchase it at the copyright price, there was a benefit the system currently doesn’t realize. But as everyone has admitted without reservation in this thread, demand for a cheaper product would be / is vastly higher.
If, now that I’ve demonstrated what I wanted to demonstrate, what I was asked to explain, you wish to include other nebulous benefits that haven’t been mentioned at all in favor of copyrights in order to dispute the demonstration, you are free to do so. But I will consider that moving the goal posts.
If you wish to address the hypothetical as if it could be realized it has ceased to function as an illustration of a point and gone way beyond a hypothetical into a full-blown proposal. It was never meant to be a proposal. I didn’t present it as one. I’ve never said I even had a proposal. I still don’t have a proposal. I just have this problem, related to the marginal cost. Post 85. That’s it.
Ok, so the people that didn’t buy get it for free if they choose, or they pay a small fee to someone that placed it onto a DVD.
It was confusing when you talked about people paying $19 and $18 because once the copyright was removed the price would drop to zero for many and slightly above for some - so that was very confusing - it sounded like you had some other part to this thing.
Did I ever mention other nebulous benefits?
What I did mention was that any system in which some people pay a much higher fee for something that then allows other to get it more cheaply will quickly alter the landscape. Consumers will change how they value things because valuation is not done in a vacuum, it is relative to all other ways they could spend their money.
But your point was not just that there is excess demand because we already know that, your point was that we “could” increase social welfare. To make that point you do need to walk through all of the math and include how people value items in the marketplace, otherwise you aren’t really making that point, you are just reiterating that there is excess demand.
Perhaps I don’t understand your use of hypothetical. A hypothesis give a broad outline of how a problem can be solved, without the details, which would be in a proposal. For instance, how we would set the production price might be unclear, but we can ignore that while examining the bigger picture.
However a hypothetical which flies in the face of economic realities hardly merits the name. That people who would wish to purchase the DVD but don’t do so because of price is (maybe) a problem. What everyone else is doing is examining the bigger impact of a solution to this problem, and pretty much coming up with the conclusion that this is always going to happen.
We can come up with tons of impractical hypotheticals. How about the problem of the “monopoly” of car ownership, enforced by keys. We can imagine a system where no one owns cars, but all cars are free to all, with the keys left in at all times. I can come up with a list of benefits of such a system, but I suspect it won’t work. So, what’s the use?
Again, I dispute free. But I’m fine with allowing it for the sake of discussion.
It was an answer to the question, “What do you mean by consumer surplus?”
Yes, everything is always done that way. But they paid $22. They felt it was worth $22 dollars (or more). If your assertion is that part of the reason they value it at $22 is because it is $22 then this would be a side-effect of the copyright in question—a facet never offered until this point.
Everyone said: Disney benefits and needs just this incentive. So I give them the same incentive, from the same people that already revealed that they thought the DVD was worth $22. But don’t give Disney the copyright. All else equal, then, everyone who buys the DVD at the market price but wouldn’t buy it at the monopoly price has benefited without anyone else taking a loss.
The math is available for your inspection in any discussion of monopolies. I was not aware that this facet of monopolies was ever in question, only that our current course were somehow the necessary course.
I wasn’t aware there was such contention over automobiles. I am not sure what problem this hypothetical would be meant to address, but the tools we use to illustrate a problem don’t need to bear any relationship to a workable solution in my book. I guess your book is different.
They value it at $22 because competing products are priced similarly.
if AiW was $22 but all other movies were priced much lower to this person due to this new model (i.e. they didn’t spend on AiW2 because they didn’t value it at $22, but now they can get it for $0.75), then, in some substantial number of cases, the person would no longer value AiW at $22.
No I would not be prepared to say that, and I don’t think I’ve posted anything that implies that.
What I did post is that stating that social welfare was increased in your hypothetical was “tricky” to determine, because that hypothetical model CHANGES the valuation process of humans.
That is my point: a world in which content was handled in the way you described would change human behavior because humans factor in their entire economic landscape when valuing things. And the end result COULD be that Disney gets less money. It’s tough to know.
Anything COULD happen. Even scientific laws have their approximations. We hold the world steady to turn on just one point all the time. I don’t know why this is particularly questionable or surprising. But, it’s not terribly important. I illustrated what my problem was. That’s my problem. Feel free to think it is not a problem. I don’t have much of a bone in this fight. Maybe someday if I envision a resolution or read of someone else’s.
Why not answer the question and also ask a question in the same post? It’s more efficient.
To maximize consumer surplus, it would seem that producer surplus would need to be minimized. I know you have a hypothetical in which only one side is affected but I don’t think it’s mathematically possible.
I contend that the current system actually does this - but I’m assuming that producer surplus is money received above the entire production cost, both fixed and variable.
There is consumer surplus whenever anyone buys something at a price below its value to them - so a $22 DVD can represent consumer surplus for someone willing to pay $50 for it.
Since prices drop in steps, there is also a surplus as time goes on and the price of something diminishes - either through being reissued in cheaper editions, remaindered, or showing up used. Someone willing to to pay $20 for the DVD who gets it used at $5 for example.
Disney tries to reduce this by withdrawing a DVD rather then reducing its price, but that doesn’t eliminate the used market.
So, do you have evidence that we’re not in equilibrium already? Produces price things to maximize revenue, and consumers buy things with positive consumer surplus. Producers make mistakes and there are psychological factors at work, but you haven’t convinced me yet that there is a problem.
Perhaps. Nothing guarantees that an equilibrium is non-shitty, depending on your definition of shitty.
Describe how we can do better. I can do some of this. I’m all for copyright being for the life of the human creator, but I’m not so much for it extending much past that. I say this though my wife’s father is a composer and still makes money at 96. I’m all for limiting the term of a copyright for corporately owned works. I’m all for a creator getting a good return on his or her or its creation, but also recognizing the benefits to society of free access to classic (or just old) material.
Just to note that none of these things are fundamental changes to the system. They’re just fiddling with the term of protection. And, as an aside, the copyright term is what it is now at least partially because of efforts to harmonize the global copyright system. We’d have to persuade all the other Berne signatories that shortening the term is a good idea.
