Difference between revisions of "Bae and Choi (2006)"

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|Source={{Source
 
|Source={{Source
 
|Name of Study=Bae and Choi (2006)
 
|Name of Study=Bae and Choi (2006)
|Author=Sang Hoo Bae and Jay Pil Choi
+
|Author=Bae, S. H.; Choi, J. P.;
 
|Title=A Model of Piracy
 
|Title=A Model of Piracy
 
|Year=2005
 
|Year=2005
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on software usage and the long-run effects on development incentives. We consider two types of costs associated with piracy: the reproduction cost that is constant across users and the degradation cost that is proportional to consumers’ valuation of the original product. We show that the effects of piracy depend crucially on the nature of piracy costs. Policy implications concerning copyright protection are also discussed.
 
on software usage and the long-run effects on development incentives. We consider two types of costs associated with piracy: the reproduction cost that is constant across users and the degradation cost that is proportional to consumers’ valuation of the original product. We show that the effects of piracy depend crucially on the nature of piracy costs. Policy implications concerning copyright protection are also discussed.
 
|Authentic Link=http://www.sciencedirect.com/science/article/pii/S0167624506000278
 
|Authentic Link=http://www.sciencedirect.com/science/article/pii/S0167624506000278
|Reference=Novos and Waldman (1984); Johnstone (1985); Yoon (2001); Harbaugh and Khemka (2001);
+
|Reference=Novos and Waldman (1984);Johnstone (1985);Yoon (2001);Harbaugh and Khemka (2001);
|Plain Text Proposition=We demonstrate that with the threat of piracy the monopolist’s price is lowered, and usage
+
|Plain Text Proposition=We demonstrate that with the threat of piracy the monopolist’s price is lowered, and usageof an authorized copy is increased in both regimes with positive welfare implications. Thisresult provides a sharp contrast to the common claims of copyright holders, in which thepossibility of piracy reduces demand for a legal copy.
of an authorized copy is increased in both regimes with positive welfare implications. This
+
|FundamentalIssue=1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare,4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
result provides a sharp contrast to the common claims of copyright holders, in which the
+
|EvidenceBasedPolicy=F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
possibility of piracy reduces demand for a legal copy.
 
|FundamentalIssue=1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare, 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption),
 
|EvidenceBasedPolicy=F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness),
 
 
|Discipline=L1: Market Structure; Firm Strategy; and Market Performance, L82: Entertainment • Media, L86: Information and Internet Services • Computer Software, O34: Intellectual Property and Intellectual Capital
 
|Discipline=L1: Market Structure; Firm Strategy; and Market Performance, L82: Entertainment • Media, L86: Information and Internet Services • Computer Software, O34: Intellectual Property and Intellectual Capital
|Intervention-Response=* Increase in the level of piracy can lead to an increase in demand for the legitimate good
+
|Intervention-Response=* An increase in the level of piracy can lead to an increase in demand for the legitimate good.
* This is in opposition to what many copyright holders argue
+
* This is in opposition to what many copyright holders argue.
|Description of Data=We consider two types of costs associated with piracy: the reproduction cost that is constant across users and the degradation cost that is proportional to consumers’ valuation of the original product. We show that the effects of piracy depend crucially on the nature of piracy costs.
+
|Description of Data=This study considers the two types of costs associated with piracy: the reproduction cost that is constant across users and the degradation cost that is proportional to consumers’ valuation of the original product. The authors demonstrate that the effects of piracy depend crucially on the nature of piracy costs. The study also uses data on piracy levels published by the Business Software Alliance from 2004.
 
|Data Year=1991 to 2007
 
|Data Year=1991 to 2007
 
|Data Type=Secondary data
 
|Data Type=Secondary data
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|Method of Collection=Quantitative Collection Methods, Quantitative data/text mining, Qualitative Collection Methods, Case Study
 
|Method of Collection=Quantitative Collection Methods, Quantitative data/text mining, Qualitative Collection Methods, Case Study
 
|Method of Analysis=Quantitative Analysis Methods, Quantitative content analysis (e.g. text or data mining)
 
|Method of Analysis=Quantitative Analysis Methods, Quantitative content analysis (e.g. text or data mining)
|Industry=Software publishing (including video games); Creative, arts and entertainment; Film and motion pictures; Sound recording and music publishing;
+
|Industry=Software publishing;
 
|Country=Global;
 
|Country=Global;
 
|Cross-country=Yes
 
|Cross-country=Yes
 
|Comparative=Yes
 
|Comparative=Yes
 
|Government or policy=No
 
|Government or policy=No
|Literature review=Yes
+
|Literature review=No
 
}}
 
}}
 
|Dataset={{Dataset
 
|Dataset={{Dataset
 
|Sample Size=2
 
|Sample Size=2
|Level of Aggregation=Two types of costs associated with piracy,
+
|Level of Aggregation=Two types of costs associated with piracy
 
|Data Material Year=1991 - to 2007
 
|Data Material Year=1991 - to 2007
 
}}{{Dataset
 
}}{{Dataset
 
|Sample Size=1
 
|Sample Size=1
|Level of Aggregation=Individual data,
+
|Level of Aggregation=Piracy data
 
|Data Material Year=2004
 
|Data Material Year=2004
 
}}
 
}}
 
}}
 
}}

Latest revision as of 07:39, 3 November 2022

Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education Libraries, archives, museums and other cultural activities

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing Video game publishing Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Bae and Choi (2006)
Title: A Model of Piracy
Author(s): Bae, S. H., Choi, J. P.
Year: 2005
Citation: Bae, Sang Hoo, and Jay Pil Choi. A model of piracy. Information Economics and Policy 18.3 (2006): 303-320.
Link(s): Definitive
Key Related Studies:
Discipline:
Linked by: Moores (2010)
About the Data
Data Description: This study considers the two types of costs associated with piracy: the reproduction cost that is constant across users and the degradation cost that is proportional to consumers’ valuation of the original product. The authors demonstrate that the effects of piracy depend crucially on the nature of piracy costs. The study also uses data on piracy levels published by the Business Software Alliance from 2004.
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:
  • 1991 to 2007
Funder(s):

Abstract

This paper develops a simple model of software piracy to analyze the short-run effects of piracy on software usage and the long-run effects on development incentives. We consider two types of costs associated with piracy: the reproduction cost that is constant across users and the degradation cost that is proportional to consumers’ valuation of the original product. We show that the effects of piracy depend crucially on the nature of piracy costs. Policy implications concerning copyright protection are also discussed.

Main Results of the Study

We demonstrate that with the threat of piracy the monopolist’s price is lowered, and usageof an authorized copy is increased in both regimes with positive welfare implications. Thisresult provides a sharp contrast to the common claims of copyright holders, in which thepossibility of piracy reduces demand for a legal copy.

Policy Implications as Stated By Author

  • An increase in the level of piracy can lead to an increase in demand for the legitimate good.
  • This is in opposition to what many copyright holders argue.



Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Green-tick.png
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

Sample size: 2
Level of aggregation: Two types of costs associated with piracy
Period of material under study: 1991 - to 2007


Sample size: 1
Level of aggregation: Piracy data
Period of material under study: 2004