Competition Over Piratable Goods

CORE Discussion Paper No. 2004/55

33 Pages Posted: 21 Feb 2006

See all articles by Paul Belleflamme

Paul Belleflamme

CORE and Louvain School of Management, UCL (Université Catholique de Louvain); CESifo (Center for Economic Studies and Ifo Institute)

Pierre M. Picard

Centre de Recherche en Économie Appliquée (CREA); Universite du Luxembourg

Date Written: July 2004

Abstract

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

Belleflamme, Paul and Picard, Pierre M., Competition Over Piratable Goods (July 2004). CORE Discussion Paper No. 2004/55. Available at SSRN: https://ssrn.com/abstract=882804 or http://dx.doi.org/10.2139/ssrn.882804

Paul Belleflamme (Contact Author)

CORE and Louvain School of Management, UCL (Université Catholique de Louvain) ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Pierre M. Picard

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

Universite du Luxembourg

L-1511 Luxembourg
Luxembourg

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