mflow and economics fun

It’s nice (and perhaps, dare I say unusual?) when an economic paper comes to life. A while ago a group of researchers in Germany reported on an experiment testing attitudes to a legal file-sharing site with a twist: revenue was split between sellers and sharers.

So if user A downloaded a file from user B, user B would keep a percentage of the purchase price, with the rest going to the “professional seller”. The study found that users responded positively to revenue-splitting – users felt that they were being taken seriously and thought the arrangement to be fair. This is particularly important when surveys suggest many potential music fans don’t see anything wrong with pirating, because a pirated copy just means less money for overpaid music executives.

Users also enjoyed feeling part of an online community.

And now, we have mflow, where users who successfully get one of their friends to buy a track get a 20% cut.

Tried and tested in the lab – but will it work in practice?

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