Market Piracy in the Design-Based Industry: Economics and Policy regulation

Pierre-Jean Benghozi () and Walter Santagata
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Pierre-Jean Benghozi: CRG - Centre de recherche en gestion - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique
Walter Santagata: CRG - Centre de recherche en gestion - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique

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Abstract: Market piracy in the design-based industry is an expanding worldwide phenomenon (Grossman and Shapiro, 1988a,b; Chaudhry and Walsh, 1996; Schultz II and Saprito, 1996). It deserves a great deal of attention both because of its impressive international dimension (Verma, 1996) and its intrinsic illegality, ambiguity and powerfull potential links with criminal organizations (Andreano and Sigfried, 1980; Fiorentini and Peltzman, 1995). The aim of this paper is to develop theoretical arguments about economic agents' behavior and to shed some light on the main regulatory issues of illegal markets. At a first sight the room for rational incentives to commercial piracy is self-evident. On one hand, an original backpack by the Italian stylist Prada costs, for instance, $ 510 in Manhattan, New York, and a bootleg copy costs $ 70 in Rome, just in front of Castel Sant'Angelo. On the other hand, the number of units sold can be impressive: as an example Louis Vuitton sells 3.5 millions units per year. Market piracy is usually noticed in sectors such as luxury goods or fashion, but piracy can also be observed in more traditional sectors such as car manufacturers, "bureautic" industry, cooking utensils, aircraft-parts and so on.

Keywords: creative industries; managing creation; creative process; cultural industries; regulation; competition (search for similar items in EconPapers)
Date: 2001
Note: View the original document on HAL open archive server: https://hal.science/hal-00262515v1
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Citations: View citations in EconPapers (5)

Published in Économie appliquée : archives de l'Institut de science économique appliquée, 2001, LIV (3), pp.121-148

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