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Selective Enforcement of Copyright as an Optimal Monopolistic Behavior

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Author Info
Danny Ben-Shahar (The Interdisciplinary Center)
Assaf Jacob (IDC)
Abstract

We present a perfect Nash equilibrium in which the creator of a work, motivated by economic considerations, selectively enforces her own copyright. In fact, the creator may not only permit, but may strategically promote infringement of the copyright, thereby participating indirectly in predatory pricing, and so raising barriers to entry. Our model is highly applicable to the software industry, where relatively high entry costs and the relatively low cost of copyright infringement make this phenomenon likely. We further show the conditions under which exogenous intervention, through intensive enforcement of copyrights, increases social welfare. Finally, we explore some potential strategies for such legal intervention.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Contributions to Economic Analysis & Policy.

Volume (Year): 3 (2004)
Issue (Month): 1 ()
Pages: 1189-1189
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Handle: RePEc:bep:eapcon:v:3:y:2004:i:1:p:1189-1189

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Related research
Keywords: Antitrust Copyright Predatory Pricing Monopoly Microsoft Nash Equilibrium Price Discrimination

Find related papers by JEL classification:
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Liebowitz, S J, 1985. "Copying and Indirect Appropriability: Photocopying of Journals," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 945-57, October. [Downloadable!] (restricted)
  2. William D. Nordhaus, 1969. "An Economic Theory of Technological Change," Cowles Foundation Discussion Papers 265, Cowles Foundation, Yale University. [Downloadable!]
  3. Ordover, Janusz A & Willig, Robert D, 1978. "On the Optimal Provision of Journals qua Sometimes Shared Goods," American Economic Review, American Economic Association, vol. 68(3), pages 324-38, June. [Downloadable!] (restricted)
  4. Michael Waldman, 1991. "The Role of Multiple Potential Entrants/Sequential Entry in Noncooperative Entry Deterrence," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 446-453, Autumn. [Downloadable!] (restricted)
  5. Landes, William M & Posner, Richard A, 1989. "An Economic Analysis of Copyright Law," Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 325-63, June.
  6. Takeyama, Lisa N, 1994. "The Welfare Implications of Unauthorized Reproduction of Intellectual Property in the Presence of Demand Network Externalities," Journal of Industrial Economics, Blackwell Publishing, vol. 42(2), pages 155-66, June. [Downloadable!] (restricted)
  7. Besen, Stanley M., 1986. "Private copying, reproduction costs, and the supply of intellectual property," Information Economics and Policy, Elsevier, vol. 2(1), pages 5-22. [Downloadable!] (restricted)
  8. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 158-74, February. [Downloadable!] (restricted)
  9. Novos, Ian E & Waldman, Michael, 1984. "The Effects of Increased Copyright Protection: An Analytic Approach," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 236-46, April. [Downloadable!] (restricted)
  10. Kai-Lung Hui & Ivan Png, 2003. "Piracy and the Legitimate Demand for Recorded Music," Contributions to Economic Analysis & Policy, Berkeley Electronic Press, vol. 2(1), pages 1160-1160. [Downloadable!] (restricted)
  11. Nordhaus, William D, 1969. "An Economic Theory of Technological Change," American Economic Review, American Economic Association, vol. 59(2), pages 18-28, May. [Downloadable!] (restricted)
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