 Piracy prevention and the pricing of information goodsHelmuth Cremer and Pierre Pestieau Post-Print from HAL Abstract: This paper studies the effects of piracy on prices and welfare and determines the optimal enforcement policy. A monopolist sells an information good at a non-linear price in two versions designed for two types of consumers with different willingness to pay. Consumers with low willingness to pay consumers can copy the good at some cost and with some quality loss. High valuation customers cannot engage in full-fledged piracy. However, they can consume the version designed for the other customer type. We show that copying or piracy may be welfare enhancing because it enables a good to be provided to individuals with a low willingness to pay without undermining the producing firm's ability to finance the development cost via the pricing scheme applied to high valuation consumers. There are then three levels of piracy control. The highest is that chosen by the private monopoly. The next level is the one chosen by a welfare-maximizing monopoly. The lowest level, which can be zero, is the level of control chosen by the public authority when the good is sold (and priced) by a profit-maximizing monopoly. Keywords: Piracy; Copying; Intellectual property; Information good (search for similar items in EconPapers) Published in Information Economics and Policy, 2009, 21 (1), pp.34-42. ⟨10.1016/j.infoecopol.2008.09.003⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754396 DOI: 10.1016/j.infoecopol.2008.09.003 Access Statistics for this paper More papers in Post-Print from HAL |
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