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Is Imitation Bad for the Production of Creative Works?

Bae Sang Hoo () and Yoo Kyeongwon ()
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Bae Sang Hoo: Clark University, 950 Main St., Worcester, MA01610, USA
Yoo Kyeongwon: Sangmyung University, 7 Hongji-dong Chongro-gu, Seoul, Korea

Review of Network Economics, 2021, vol. 19, issue 2, 115-144

Abstract: This paper develops a theoretical framework to discuss the positive role of imitative works where creators often have private information about their creative abilities and may need outside investment. Within this framework, we consider the impact of three types of copyright protection during the different stages: the production, distribution, and consumption of creative works. Different types of enforcement can discourage imitation (production-side enforcement), limit distribution (supply-side enforcement), and restrict consumption (demand-side enforcement) of unauthorized copies of creative works. The last two types of infringement are called end-user piracy since these involve end-users, who actively search and illegally access creative works. The main results show that substitutability exists between copyright protection against end-user piracy since both types of enforcement increase the creator’s incentive with a higher return. However, it cannot solve the inefficient investment problem due to information asymmetry. There exists complementarity between copyright protection against end-user piracy and imitation. When weak protection against end-user piracy yields the overproduction of creative works, a high level of protection against imitation can minimize the related inefficiencies. However, when end-user piracy enforcement increases and brings underproduction, imitative works can benefit society.

Keywords: intellectual property rights; copyright protection; piracy; imitation; information asymmetry (search for similar items in EconPapers)
JEL-codes: L13 L82 L86 O34 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1515/rne-2020-0012

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