Demand for “authentic” song

da=f(pa, tca, va, qa, lla, aa)

 

Demand for pirated song

dp=f(pp, tcp, vp, qp, llp, ap)

 

where:

pi= price

tci= transaction costs

vi= perceived probability of getting a virus

qi=perceived quality

lli=perceived probability of legal liability

ai=”altruism” toward supplier

 

and

 

i=a, signifies authentic

i=p, signifies pirated