I think there are various levels of "badness" when it comes to theft:<p>1) When you steal your neighbour's car, that's the worst because you're completely depriving your neighbour of the exclusive use and enjoyment of their property.<p>2) When you copy a digital product that your neighbour has created, and then sell it for profit without paying royalties, then that's pretty bad, but less bad than 1). Your neighbour can still sell / use their works but you have deprived him/her of exclusivity in selling their works.<p>3) When you copy your neighbour's digital product for your own enjoyment, then you are depriving your neighbour of a potential sale. Still bad, but less bad than 1) and 2). It's only when everyone does it and your neighbour loses all their potential sales does it become as bad as 1), i.e. tragedy of the commons.<p>I'm not at all suggesting that reproducible digital products are public goods, but they share some similar characteristics in the context of piracy that I think are interesting, namely non-rivalness and non-excludability. And as mentioned before, a tragedy of the commons scenario occurs when everyone (or lots of people) engage in piracy, just like what happens when all fishermen over-fish a lake.<p>This obviously suggests that some kind of regulation is needed, which I suppose is the point of copyright laws. But what I'd like to know are the economic effects of piracy, for example:<p>What is the "piracy elasticity of demand"? In other words, how does demand for a product change as piracy levels change? Obviously as piracy levels approach 100%, the demand would be near zero, but what are the changes between 0 to 100%. Of interest is if there are any "sweet spot" levels of piracy where demand actually goes up.<p>I suspect there's a possibility that at low levels of piracy, the positive effects from things such as word-of-mouth marketing, early adoption / user familiarity (particularly in software) and try-before-buyers could offset the negative effects of lost sales. (Has anyone done this research?)<p>Anyway my point is that I don't think all theft is created equal, and that some kinds of theft do not dis-incentivize producers as the OP has asserted.