Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22965
Authors: 
Gürtler, Oliver
Year of Publication: 
2006
Series/Report no.: 
Bonn econ discussion papers 2006,20
Abstract: 
In this paper, the market for video games is considered, where some firms produce both, hardware and software. It is analyzed, whether these firms are interested in strategically enabling software piracy. It will be shown that this is indeed the case, if firms di¤er substantially in hardware production costs. Then, the low-cost producer gains from enabling software piracy in two ways. First, it increases its market share in the hardware and, accordingly, in the software market. Second, it can raise its hardware price. These two benefits overcompensate the loss resulting from a higher fraction of pirating consumers in the software market.
Subjects: 
Video Games Market
Software Piracy
Fundamental Transformation
JEL: 
L86
L13
D21
Document Type: 
Working Paper

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