Why do Software Manufacturers Tolerate Piracy in Transition and Less Developed Countries? A theoretical model
AbstractThis paper provides an explanation as to why software manufacturers from developed countries tolerate widespread copyright infringement in less developed countries and often even offer local versions of their products. In a simple two-period framework, I show that if network externalities are present and an improvement in copyright enforcement is expected, then it is profitable for the software manufacturer to enter the market even if it incurs losses in the beginning when copyright enforcement is weak.
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Bibliographic InfoPaper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp231.
Date of creation: Sep 2004
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Intellectual property rights; Software; Piracy; Transition; Network externalities.;
Find related papers by JEL classification:
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property Rights
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
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