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The Market for Intellectual Property: The Case of Complementary Oligopoly

THE ECONOMICS OF COPYRIGHT: DEVELOPMENTS IN RESEARCH AND ANALYSIS, W. Gordon, R. Watt, eds., Elgar Publishing, 2003

George Mason Law & Economics Research Paper No. 02-19

31 Pages Posted: 19 Sep 2003  

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Ben Depoorter

University of California Hastings College of Law; Ugent - CASLE; Stanford CIS

Abstract

This paper applies a model of complementary oligopoly and anticommons pricing to the market for intellectual property rights. Our model demonstrates a surprising and interesting overlooked result: In the market for complementary goods, price coordination and monopolistic pricing do not necessarily represent inefficient equilibria, when compared to the alternative Nash equilibrium. Due to the peculiar cross-price effects in the supply of complementary goods, price coordination and monopolistic supply often constitute an improvement over the alternative equilibrium outcomes. To be precise, the welfare effects of competition and price coordination depend on the nature of the intellectual product concerned. This has significant and obvious implications for the economic analysis of copyright collectivization, as well as for antitrust regulation in this area.

Keywords: Law and Economics, Property Law, Antitrust Law, anticommons, intellectual property, copyright collectives, complementary oligopoly

JEL Classification: K1, K11, K21, IO, L12

Suggested Citation

Parisi, Francesco and Depoorter, Ben, The Market for Intellectual Property: The Case of Complementary Oligopoly. THE ECONOMICS OF COPYRIGHT: DEVELOPMENTS IN RESEARCH AND ANALYSIS, W. Gordon, R. Watt, eds., Elgar Publishing, 2003; George Mason Law & Economics Research Paper No. 02-19. Available at SSRN: https://ssrn.com/abstract=317605 or http://dx.doi.org/10.2139/ssrn.317605

Francesco Parisi (Contact Author)

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Ben Depoorter

University of California Hastings College of Law ( email )

200 McAllister Street
San Francisco, CA 94102
United States

Ugent - CASLE ( email )

Universiteitstraat 4
Belgium

Stanford CIS ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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