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Competition over Piratable Goods

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  • P Belleflamme
  • P M Picard

Abstract

The effects of (private, small-scale) copying on the pricing behavior of producers of information goods are studied within a unified model of vertical differentiation. Although information goods are assumed to be perfectly horizon tally differentiated, demands are interdependent because the copying technology exhibits increasing returns to scale. We characterize the symmetric Nash equilibria of the pricing game played by n producers of information goods. We show thereby how the producers' attitudes towards piracy are interdependent and evolve with the relative attractiveness of copies.

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Bibliographic Info

Paper provided by Economics, The University of Manchester in its series The School of Economics Discussion Paper Series with number 0332.

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Date of creation: 2003
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Handle: RePEc:man:sespap:0332

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  1. Bae, Sang Hoo & Choi, Jay Pil, 2006. "A model of piracy," Information Economics and Policy, Elsevier, vol. 18(3), pages 303-320, September.
  2. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 158-74, February.
  3. Martin Peitz & Patrick Waelbroeck, 2003. "Piracy of Digital Products: A Critical Review of the Economics Literature," CESifo Working Paper Series 1071, CESifo Group Munich.
  4. Paul Belleflamme, 2002. "Pricing Information Goods in the Presence of Copying," Working Papers 463, Queen Mary, University of London, School of Economics and Finance.
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Cited by:
  1. BELLEFLAMME, Paul & PICARD, Pierre, 2005. "Piracy and competition," CORE Discussion Papers 2005083, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Peitz, Martin & Waelbroeck, Patrick, 2006. "Piracy of digital products: A critical review of the theoretical literature," Information Economics and Policy, Elsevier, vol. 18(4), pages 449-476, November.

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