Piracy and Competition

Paul Belleflamme and Pierre Picard

Journal of Economics & Management Strategy, 2007, vol. 16, issue 2, 351-383

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 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 may lead to price dispersion. Competition reduces total surplus in the short run but provides higher incentives to create in the long run.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
https://doi.org/10.1111/j.1530-9134.2007.00142.x

Related works:
Working Paper: Piracy and competition (2007)
Working Paper: Piracy and competition (2005)
Working Paper: Piracy and competition (2005)
Working Paper: Piracy and Competition (2004)
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: https://EconPapers.repec.org/RePEc:bla:jemstr:v:16:y:2007:i:2:p:351-383

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1

Access Statistics for this article

More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().