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Competition over Piratable Goods

  • P Belleflamme
  • P M Picard

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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File URL: http://www.socialsciences.manchester.ac.uk/medialibrary/economics/discussionpapers/EDP-0332.pdf
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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
Contact details of provider: Postal: Manchester M13 9PL
Phone: (0)161 275 4868
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Web page: http://www.socialsciences.manchester.ac.uk/subjects/economics/

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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. Gayer, Amit & Shy, Oz, 2003. "Copyright protection and hardware taxation," Information Economics and Policy, Elsevier, vol. 15(4), pages 467-483, December.
  3. Yoon, Kiho, 2002. "The optimal level of copyright protection," Information Economics and Policy, Elsevier, vol. 14(3), pages 327-348, September.
  4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
  5. Martin Peitz & Patrick Waelbroeck, 2003. "Piracy of Digital Products: A Critical Review of the Economics Literature," CESifo Working Paper Series 1071, CESifo Group Munich.
  6. Koboldt, Christian, 1995. "Intellectual Property and Optimal Copyright Protection," CSLE Discussion Paper Series 95-01, Saarland University, CSLE - Center for the Study of Law and Economics.
  7. Paul Belleflamme, 2002. "Pricing Information Goods in the Presence of Copying," Working Papers 463, Queen Mary University of London, School of Economics and Finance.
  8. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 158-74, February.
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