Copyright Protection And Innovation In The Presence Of Commercial Piracy
This paper uses a strategic entry-deterrence approach to address the effects of anti-commercial piracy policies on a firmâ€™s incentive to innovate. Monitoring increases the firmâ€™s incentive to innovate. However, inclusion of innovation does not necessarily result in monitoring as the socially optimal policy. If monitoring is the socially optimal policy then the commercial pirateâ€™s entry may or may not be deterred. The entry-deterring limit price and quality is less than that in the monopoly case. Only in the extreme situation the monopoly results are restored.
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