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Limiting End-user Piracy - The Role of Private and Public Anti-Piracy Measure

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  • Yuanzhu Lu

    (China Economics and Management Academy, Central University of Economics and Finance)

  • Sougata Poddar

    (Argyros School of Business and Economics, Chapman University)

Abstract

We study when the original product developer makes costly investment to deter end-user piracy in a given regime of IPR protection. We find that when the consumers' tastes are sufficiently diverse and IPR protection is weak, only then it is profitable for the product developer to tolerate piracy. In all the other cases, it is profitable to deter, unless piracy is blockaded by strong IPR protection. The relationship between the optimal deterrence level from the product developer (private anti-piracy measure) and the degree of IPR protection in the economy (public anti-piracy measure) can be monotonic or non-monotonic. The private optimal deterrence level generally increases with the quality of the pirated good except when consumers' tastes are sufficiently diverse and the quality of the pirated good is sufficiently high. Public antipiracy measure unambiguously reduces piracy.

Suggested Citation

  • Yuanzhu Lu & Sougata Poddar, 2019. "Limiting End-user Piracy - The Role of Private and Public Anti-Piracy Measure," Annals of Economics and Finance, Society for AEF, vol. 20(1), pages 181-197, May.
    • Handle: RePEc:cuf:journl:y:2019:v:20:i:1:lupoddar
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    References listed on IDEAS

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    More about this item

    Keywords

    IPR protection; Private copyright protection; Piracy rate; Product quality; End-user piracy;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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