Does Copyright Enforcement Encourage Piracy?

18 Pages Posted: 4 Jun 2010

See all articles by Rick Harbaugh

Rick Harbaugh

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy; Indiana University - Department of Economics

Rahul Khemka

Claremont McKenna College

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Abstract

When copyright enforcement is targeted at high-value buyers such as corporate and government users, the copyright holder charges super-monopoly prices, thereby encouraging low-value buyers to switch to inferior pirated copies. We show that enlarging the copyright holder's captive market through more extensive copyright enforcement reduces prices toward the monopoly level, increases sales of legitimate copies and can increase consumer surplus. Therefore, in contrast with the case of more intensive copyright enforcement, more extensive copyright enforcement over some range can increase the incentive to generate intellectual property while also reducing the loss to consumers from monopoly power.

Suggested Citation

Harbaugh, Rick and Khemka, Rahul, Does Copyright Enforcement Encourage Piracy?. The Journal of Industrial Economics, Vol. 58, Issue 2, pp. 306-323, June 2010, Available at SSRN: https://ssrn.com/abstract=1615805 or http://dx.doi.org/10.1111/j.1467-6451.2010.00419.x

Rick Harbaugh (Contact Author)

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-855-2777 (Phone)
812-855-3354 (Fax)

HOME PAGE: http://www.bus.indiana.edu/riharbau/

Indiana University - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

Rahul Khemka

Claremont McKenna College

Claremont, CA 91711-6420
United States

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