Versioning of information goods under the threat of piracy

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The present study investigates the effects of piracy on the quality decisions of a firm that produces two versions of an information good: that is, one version for a consumer with a high willingness to pay and a second version for a consumer with a low willingness to pay. On the assumption that there is no quality difference between the original and the illegal copy and that the cost of the copy is constant across users, we show that the presence of piracy induces the firm to choose a lower level of quality of the former and a higher level of quality of the latter relative to decisions made in the absence of piracy. We also discuss policy implications concerning the socially optimal level of copyright protection. (C) 2010 Elsevier B.V. All rights reserved.
Publisher
ELSEVIER SCIENCE BV
Issue Date
2010-12
Language
English
Article Type
Article
Keywords

NETWORK EXTERNALITIES; COPYRIGHT PROTECTION; APPROPRIABILITY; STRATEGIES

Citation

INFORMATION ECONOMICS AND POLICY, v.22, no.4, pp.332 - 340

ISSN
0167-6245
DOI
10.1016/j.infoecopol.2010.07.001
URI
http://hdl.handle.net/10203/21357
Appears in Collection
MT-Journal Papers(저널논문)
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