Music piracy: A case of “The Rich Get Richer and the Poor Get Poorer”

► We present a model of music piracy with endogenous copying costs. ► Copying costs decrease as the number of originals sold increases. ► The sales of stars' music suffer more from piracy than those of smaller artists. ► Yet piracy can increase the recognition of an artist's music. ► Stars, but not smaller artists, offset sales losses with recognition-related income.