Yoon (2002)
Contents
Source Details
Yoon (2002) | |
Title: | The Optimal Level of Copyright Protection |
Author(s): | Yoon, K. |
Year: | 2002 |
Citation: | Yoon, K. The optimal level of copyright protection. Information Economics and Policy 14.3 (2002): 327-348. |
Link(s): | Definitive , Open Access |
Key Related Studies: | |
Discipline: | |
Linked by: | Piolatto and Schuett (2012) |
About the Data | |
Data Description: | This study compares three different models of copyright enforcement: no protection, low protection and high protection utilising 10 previous empirical studies. The authors then produce a model of optimum enforcement level. The study also uses data published by the Business Software Alliance from 1999. |
Data Type: | Secondary data |
Secondary Data Sources: | |
Data Collection Methods: | |
Data Analysis Methods: | |
Industry(ies): | |
Country(ies): | |
Cross Country Study?: | Yes |
Comparative Study?: | Yes |
Literature review?: | No |
Government or policy study?: | No |
Time Period(s) of Collection: |
|
Funder(s): |
Abstract
We specify the optimal level of copyright protection for an individual producer and the society as a whole. For an individual producer, the optimal level is (i) no protection, (ii) the level under which the producer’s overall profit net of the development cost is zero, or (iii) full protection. The optimal level for the society, on the other hand, critically depends on the distribution of firms’ development costs. We also show that an increase in copyright protection may increase or decrease the social welfare loss due to underutilization, while it will always decrease the social welfare loss due to underproduction.
Main Results of the Study
We first show that, contrary to the common perception, an increase in copyright protection may either increase or decrease the social welfare loss due to underutilization. In particular, we demonstrate that the optimal level of copyright protection for the underutilization problem is either no protection or full protection, depending on the relative magnitudes of producer’s marginal cost and the non-substitutability of the copy for the original, which in turn affects the marginal cost of copying. For the underproduction problem, we support the claim that an increase in copyright protection will decrease the social welfare loss due to underproduction. The change, however, is not gradual. We show that the social welfare loss due to underproduction is a step function which takes a downward jump to zero at a threshold level of copyright protection. In addition to investigating the common claims, we specify the optimal level of copyright protection for an individual producer and the society as a whole. For an individual producer, the optimal level of copyright protection is: (i) no protection, (ii) the level under which the producer’s overall profit net of the development cost is zero, or (iii) full protection. We provide conditions under which one of these protection levels is an optimal level.We also discuss the optimal level of copyright protection when there exist many firms, each of which may produce a specific copyrightable product. The optimal level of copyright protection for the society crucially depends on the distribution of firms’ development costs as well as other features of the environment.
Policy Implications as Stated By Author
- Enforcement of Copyright protection may be increasing levels of piracy in computer software
Coverage of Study
Datasets
Sample size: | 3 |
Level of aggregation: | copyright enforcement models |
Period of material under study: | 1999 |
Sample size: | 1 |
Level of aggregation: | Individual data |
Period of material under study: | 1999 |