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@pwalker8. If your argument is in fact correct, we wouldn't need anti-trust legislation since the market price can never be artificially inflated even in a monopoly or oligopoly situation. Different numbers of people are prepared to buy at different price points. Competition, even shadow competition, has the potential to drive prices down. In an already efficient market this shadow competition will damage legitimate players and may even tend to drive legitimate players out of the business and jeopardise the viability of the industry itself. However, the paper suggests that in an industry where competition is not working and pricing is well about the optimal price point, piracy may in fact be beneficial by forcing the price down towards the optimum price point where net revenue will be maximised.
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