Piracy as an ethical decision
AbstractWe consider a monopolist producer of information goods that may be subject to unauthorized copying. The key feature of our model is that we allow consumers to have ethical concerns based on equity theory that may reduce their utility of such a copy. We derive the formulas describing demand for the product. We find that piracy reduces prices and producers' profit, an effect that can be limited by such measures as copyright enforcement (proxied by expected value of punishment for piracy) and anti-piracy campaigns. Welfare effects are also analyzed and generally turn out to be ambiguous.
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Bibliographic InfoPaper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2013-22.
Length: 19 pages
Date of creation: 2013
Date of revision:
digital piracy; copyright protection; equity theory;
Find related papers by JEL classification:
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-02 (All new papers)
- NEP-COM-2013-10-02 (Industrial Competition)
- NEP-CUL-2013-10-02 (Cultural Economics)
- NEP-IUE-2013-10-02 (Informal & Underground Economics)
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