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Rewards and Copyrights with Hidden Information

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Abstract

This paper makes a theoretical contribution by investigating how the optimal copyright legislation depend on hidden information. A mixed hidden action – hidden information model is used. The regulator neither observes the type of firm nor the quality choice of firms. The paper provides no evidence that hidden information can motivate a copyright legislation. In fact it shows that the optimal policy, with asymmetric information, is a reward system that is second best.

Suggested Citation

  • Sandén, Klas, 2008. "Rewards and Copyrights with Hidden Information," CAFO Working Papers 2009:4, Linnaeus University, Centre for Labour Market Policy Research (CAFO), School of Business and Economics.
    • Handle: RePEc:hhs:vxcafo:2009_004
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    File URL: http://www.vxu.se/ehv/filer/forskning/cafo/wps/Nek_wp4_09.pdf
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    References listed on IDEAS

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    1. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 158-174, February.
    2. Banerjee, Dyuti S., 2003. "Software piracy: a strategic analysis and policy instruments," International Journal of Industrial Organization, Elsevier, vol. 21(1), pages 97-127, January.
    3. Shavell, Steven & van Ypersele, Tanguy, 2001. "Rewards versus Intellectual Property Rights," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 525-547, October.
    4. 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 236-246, April.
    5. Myerson, Roger B., 1982. "Optimal coordination mechanisms in generalized principal-agent problems," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 67-81, June.
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    More about this item

    Keywords

    Asymmetric information; Copyright; Reward system; Legislation;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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