Competition Over Piratable Goods
CORE Discussion Paper No. 2004/55
33 Pages Posted: 21 Feb 2006
Date Written: July 2004
The effects of (private, small-scale) copying on the pricing behavior of producers of information goods are studied within a unified model of vertical di¤erentiation. 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 symmetric Nash equilibria of the pricing game played by n producers of information goods. We show thereby how the producers' attitudes towards piracy are interdependent and evolve with the relative attractiveness of copies.
Keywords: Information goods, piracy, copyright, pricing
JEL Classification: L13, L82, L86, K11, O34
Suggested Citation: Suggested Citation