Piracy and Competition

No 1350, CESifo Working Paper Series from CESifo

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)
Date: 2004
New Economics Papers: this item is included in nep-com and nep-cul
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Piracy and Competition (2007)
Working Paper: Piracy and competition (2007)
Working Paper: Piracy and competition (2005)
Working Paper: Piracy and competition (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1350

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