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The Economics of IPR Protection Policies


  • Gil Ricard

    () (Department of Economics, UC Santa Cruz)


In this paper, I model competition between legal and pirate products. In this framework, the government affects competition through police spending and taxes on the legal products. Therefore, the government can choose the optimal combination of spending and taxes that fit better its goals. I show that governments focusing on eradicating piracy will use lower level of taxes and police spending than governments focused on maximizing consumption, consumer surplus, and welfare or government size. This result highlights the importance of demand side policies in the fight against piracy and challenges the traditional solo approach of supply side policies.

Suggested Citation

  • Gil Ricard, 2006. "The Economics of IPR Protection Policies," Review of Network Economics, De Gruyter, vol. 5(3), pages 1-21, September.
  • Handle: RePEc:bpj:rneart:v:5:y:2006:i:3:n:1

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    References listed on IDEAS

    1. Joshua Slive & Dan Bernhardt, 1998. "Pirated for Profit," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 886-899, November.
    2. Takeyama, Lisa N, 1997. "The Intertemporal Consequences of Unauthorized Reproduction of Intellectual Property," Journal of Law and Economics, University of Chicago Press, vol. 40(2), pages 511-522, October.
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    10. Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 3-27, Winter.
    11. Hui Kai-Lung & Png Ivan, 2003. "Piracy and the Legitimate Demand for Recorded Music," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-24, September.
    12. William Landes & Douglas Lichtman, 2003. "Indirect Liability for Copyright Infringement: Napster and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 113-124, Spring.
    13. David Blackburn, 2002. "Complementarities and network externalities in casually copied goods," Estudios de Economia, University of Chile, Department of Economics, vol. 29(1 Year 20), pages 71-88, June.
    14. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
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    Cited by:

    1. Martínez-Sánchez, Francisco, 2010. "Lobbyin to prevent commercial piracy," UMUFAE Economics Working Papers 13255, DIGITUM. Universidad de Murcia.

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