Banerjee, Banerjee and Raychaudhuri (2008)

Source Details

Banerjee, Banerjee and Raychaudhuri (2008)
Title:	Optimal Enforcement and Anti-Copying Strategies to Counter Copyright Infringement
Author(s):	Dyuti Banerjee, Tanmoyee Banerjee and Ajitava Raychaudhuri
Year:	2008
Citation:	Banerjee, Dyuti S., and Ajitava Raychaudhuri. OPTIMAL ENFORCEMENT AND ANTI‐COPYING STRATEGIES TO COUNTER COPYRIGHT INFRINGEMENT. Japanese Economic Review 59.4 (2008): 519-535.
Link(s):	Definitive
Key Related Studies:	Besen and Kirby (1989) Takeyama (1994) Parker and Scotchmer (2005)
Discipline:	K4: Legal Procedure; the Legal System; and Illegal Behavior K42: Illegal Behavior and the Enforcement of Law L1: Market Structure; Firm Strategy; and Market Performance L11: Production; Pricing; and Market Structure • Size Distribution of Firms
Linked by:

About the Data
Data Description:	Literature review
Data Type:	Secondary data
Secondary Data Sources:	Indian Music Industry (IMI)
Data Collection Methods:	Qualitative Collection Methods Case Study
Data Analysis Methods:	Quantitative Analysis Methods Quantitative content analysis (e.g. text or data mining)
Industry(ies):	Film and motion pictures Creative, arts and entertainment Software publishing (including video games)
Country(ies):	India China
Cross Country Study?:	No
Comparative Study?:	Yes
Literature review?:	No
Government or policy study?:	No
Time Period(s) of Collection:	1997 to 2008
Funder(s):

Abstract

In this paper we study the mix of anti-copying investment strategies by an incumbent firm and the enforcement policies of a government that consists of monitoring and penalizing the copier to address the issue of commercial piracy. If monitoring is socially optimal then the subgame perfect equilibrium anti-copying investment does not guarantee the prevention of copying. If not monitoring is socially optimal then the subgame perfect equilibrium anti-copying investment may guarantee the prevention of copying. Our findings suggest that in countries such as India and China where enforcement policies are rather weak, it is possible to prevent copyright infringement through the adoption of anti-copying investment by producers.

Main Results of the Study

The monopolist’s strategies consisted of output and anti-copying investment that either allowed or deterred the fake producer’s entry, or prohibited copying with certainty. We called them the accommodating, aggressive and no copying strategies. The government’s social welfare maximizing monitoring rate endogenously determined the monopolist’s subgame perfect equilibrium strategy. We showed that if monitoring is not socially optimal then either the accommodating or the no copying strategies are the subgame perfect equilibrium. In the former case the equilibrium anti-copying investment does not guarantee the prevention of copying while in the latter case copying is prevented with certainty. If monitoring is socially optimal then the accommodating strategy is the subgame perfect equilibrium and copying is not prevented with certainty. In our model the government is responsible for detecting copyright infringement. Alternatively, firms may initiate the detection procedure. Promotion of socioeconomic institutions may be an alternative to detection and anti-copying strategies to reduce copyright infringement.

Policy Implications as Stated By Author

• Previous literature had examined pirated or fake goods as imperfect copies of the original competing with the original good
• With digital technology copies are now identical to the original and the consumer cannot tell the difference
• In addition to government-led enforcement, producers can also contribute to enforcement by adopting technical measures that make the original good impossible to copy

Coverage of Study

Coverage of Fundamental Issues

Issue	Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
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)
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)