Anti-piracy policy and quality differential in markets for information goods
In this paper we analyze the strategic decisions of the government, the incumbent and the pirate in a market where the good is piratable. We show that deterred or accommodated piracy can occur in equilibrium, but pure monopoly cannot occur for any anti-piracy policy. We also show that the initial quality differential between the original and the pirated product is essential to explain the effects of an increase in the quality of pirated product on both the level of piracy and the optimal monitoring rate. Assuming a one-stage entry process and a sufficiently high quality differential, we prove that the incumbent always prefers to move first and make a credible commitment to a price. However, this is not true with a two-stage entry process.
|Date of creation:||Jan 2011|
|Date of revision:|
|Publication status:||Published by Ivie|
|Contact details of provider:|| Postal: C/ Guardia Civil, 22, Esc 2a, 1o, E-46020 VALENCIA|
Phone: +34 96 319 00 50
Fax: +34 96 319 00 55
Web page: http://www.ivie.es/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marco van der Leij & Sanjeev Goyal, 2006.
"Strong Ties in a Small World,"
Tinbergen Institute Discussion Papers
06-008/1, Tinbergen Institute.
- 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.
- Wauthy, Xavier, 1996.
"Quality Choice in Models of Vertical Differentiation,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 44(3), pages 345-53, September.
- Wauthy, X., 1994. "Quality Choice in Models of Vertical Differentiation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Ming Chang & Chiu Lin & Dachrahn Wu, 2008. "Piracy and limited liability," Journal of Economics, Springer, vol. 95(1), pages 25-53, October.
- Marron, Donald B & Steel, David G, 2000. "Which Countries Protect Intellectual Property? The Case of Software Piracy," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 159-74, April.
- Luis J. Hall, 2010. "Differentiated social interactions in the US schooling race gap," Working Papers. Serie AD 2010-17, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Climent Quintana Domeque & Sonia Oreffice, 2010.
"Anthropometry and socioeconomics in the couple: evidence from the PSID,"
Working Papers. Serie AD
2010-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Sonia Oreffice & Climent Quintana, 2009. "Anthropometry and Socioeconomics in the Couple: Evidence from the PSID," Working Papers 2009-22, FEDEA.
- Sylvain Dejean, 2009.
"What can we learn from empirical studies about piracy ?,"
- Sylvain Dejean, 2009. "What Can We Learn from Empirical Studies About Piracy?," CESifo Economic Studies, CESifo, vol. 55(2), pages 326-352, June.
- Crampes, C. & Hollander, A., 1991.
"Duopoly and Quality Standards,"
Cahiers de recherche
9128, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Sougata Poddar, 2005. "Network Externality and Commercial Software Piracy," Departmental Working Papers wp0516, National University of Singapore, Department of Economics.
- Jen-Te Yao, 2005. "Counterfeiting and an Optimal Monitoring Policy," European Journal of Law and Economics, Springer, vol. 19(1), pages 95-114, January.
- Motta, Massimo, 1993. "Endogenous Quality Choice: Price vs. Quantity Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 113-31, June.
- Theo Papadopoulos, 2003. "Determinants of International Sound Recording Piracy," Economics Bulletin, AccessEcon, vol. 6(10), pages 1-9.
- MartIÂ´nez-Sánchez, Francisco, 2010. "Avoiding commercial piracy," Information Economics and Policy, Elsevier, vol. 22(4), pages 398-408, December.
- Arai, Yasuhiro, 2011. "Civil and criminal penalties for copyright infringement," Information Economics and Policy, Elsevier, vol. 23(3), pages 270-280.
- Sougata Poddar, 2005. "Why Software Piracy Rates Differ – A Theoretical Analysis," Departmental Working Papers wp0515, National University of Singapore, Department of Economics.
- Bae, Sang Hoo & Choi, Jay Pil, 2006. "A model of piracy," Information Economics and Policy, Elsevier, vol. 18(3), pages 303-320, September.
- Kiema, Ilkka, 2008. "Commercial piracy and intellectual property policy," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 304-318, October.
- repec:ebl:ecbull:v:6:y:2003:i:10:p:1-9 is not listed on IDEAS
- 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.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
- Banerjee, Dyuti S., 2006. "Lobbying and commercial software piracy," European Journal of Political Economy, Elsevier, vol. 22(1), pages 139-155, March.
- Uri Ronnen, 1991. "Minimum Quality Standards, Fixed Costs, and Competition," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 490-504, Winter.
When requesting a correction, please mention this item's handle: RePEc:ivi:wpasad:2011-02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Departamento de Edición)
If references are entirely missing, you can add them using this form.