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Title:Piracy and competition PDF Logo
Authors:Belleflamme, Paul
Picard, Pierre M.
Issue Date:2004
Series/Report no.:CESifo working papers 1350
Abstract:The effects of (private, small-scale) piracy on the pricing behavior of producers of information goods are studied within a unified model of vertical differentiation. Although information goods are assumed to be perfectly horizontally differentiated, demands are interdependent because the copying technology exhibits increasing returns to scale. We characterize the Bertrand-Nash equilibria in a duopoly. Comparing equilibrium prices to the prices set by a multiproduct monopolist, we show that competition drives prices up and reduces total surplus.
Subjects:information goods
piracy
copyright
pricing
JEL:L13
L86
L82
K11
O34
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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