Difference between revisions of "Bae and Choi (2006)"
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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); | + | |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 | ||
| + | of an authorized copy is increased in both regimes with positive welfare implications.5 This | ||
| + | result provides a sharp contrast to the common claims of copyright holders, in which the | ||
| + | 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), | |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), | |EvidenceBasedPolicy=F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness), | ||
Revision as of 21:31, 8 April 2016
Contents
Source Details
| Bae and Choi (2006) | |
| Title: | A Model of Piracy |
| Author(s): | Sang Hoo Bae and Jay Pil Choi |
| 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: | Literature review |
| Data Type: | Secondary data |
| Secondary Data Sources: | |
| Data Collection Methods: | |
| Data Analysis Methods: | |
| Industry(ies): | |
| Country(ies): | |
| Cross Country Study?: | No |
| Comparative Study?: | No |
| Literature review?: | No |
| Government or policy study?: | No |
| Time Period(s) of Collection: | |
| 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 usage of an authorized copy is increased in both regimes with positive welfare implications.5 This result provides a sharp contrast to the common claims of copyright holders, in which the possibility of piracy reduces demand for a legal copy.
Policy Implications as Stated By Author
