Piracy and Competition

Paul Belleflamme () and Pierre M. Picard ()

No CESifo Working Paper No. 1350, CESifo Working Paper Series from CESifo Group Munich

Abstract: The effects of (private, small-scale) piracy 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 horizontally differentiated, demands are interdependent because the copying technology exhibits increasing returns to scale. We characterize the Bertrand-Nash equilibria in a duopoly. Comparing equilibrium prices to the prices set by a multiproduct monopolist, we show that competition drives prices up and reduces total surplus.

Keywords: information goods; piracy; copyright; pricing (search for similar items in EconPapers)
JEL-codes: K11 L13 L82 L86 O34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-cul
Date: 2004
View list of references View citations in EconPapers

Downloads: (external link)
http://www.cesifo-group.de/DocCIDL/cesifo1_wp1350.pdf (application/pdf)

Related works:
Working Paper: Piracy and competition (2005)
Working Paper: Piracy and competition (2005)
Journal Article: Piracy and Competition (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ces:ceswps:_1350

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich
Address: Poschingerstrasse 5, 81679 Munich
Series data maintained by Julio Saavedra ().