A Preach for a Breach: Promoting Copyright Infringements as an Optimal Monopolistic Behavior

19 Pages Posted: 2 Nov 2000

See all articles by Assaf Jacob

Assaf Jacob

The Interdisciplinary Center Radziner School of Law

Danny Ben-Shahar

Tel Aviv University

Date Written: August 2000

Abstract

We discuss and formally show a multi-period equilibrium in which, counter to preliminary intuition, a creator of a work, motivated by economic considerations, promotes breach of his own copyrights. In effect, by selectively enforcing copyrights, the creator is allegedly indirectly involved in predatory pricing, thereby, raising barriers to entry. We particularly refer to the software industry where the described phenomenon is likely due to the relatively high entry cost on the one hand, and the relatively low copyright infringement cost on the other hand. We further show the conditions under which an exogenous intervention by way of intensive enforcement of copyrights increases social wealth.

JEL Classification: K21, L12, L41, O34

Suggested Citation

Jacob, Assaf M. and Ben-Shahar, Danny, A Preach for a Breach: Promoting Copyright Infringements as an Optimal Monopolistic Behavior (August 2000). Available at SSRN: https://ssrn.com/abstract=240908 or http://dx.doi.org/10.2139/ssrn.240908

Assaf M. Jacob (Contact Author)

The Interdisciplinary Center Radziner School of Law ( email )

P.O. Box 167
Herzliya, 46150
Israel
972-9-9527280 (Phone)
972-9-9568605 (Fax)

Danny Ben-Shahar

Tel Aviv University ( email )

Tel Aviv
Israel

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