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Does Copyright Enforcement Encourage Piracy?

Author

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  • RICK HARBAUGH
  • RAHUL KHEMKA
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

  • Rick Harbaugh & Rahul Khemka, 2010. "Does Copyright Enforcement Encourage Piracy?," Journal of Industrial Economics, Wiley Blackwell, vol. 58(2), pages 306-323, June.
    • Handle: RePEc:bla:jindec:v:58:y:2010:i:2:p:306-323
    DOI: 10.1111/j.1467-6451.2010.00419.x
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Žigić, Krešimir & Střelický, Jiří & Kúnin, Michael, 2023. "Copyright and firms’ own IPR protection in a software market: Monopoly versus duopoly," Economic Modelling, Elsevier, vol. 123(C).
    2. C. Bellégo & R. De Nijs, 2015. "The redistributive effect of online piracy on the box office performance of American movies in foreign markets," Documents de Travail de l'Insee - INSEE Working Papers g2015-17, Institut National de la Statistique et des Etudes Economiques.
    3. Kresimir Zigic & Jiri Strelicky & Michael Kunin, 2014. "How Does Public IPR Protection Affect its Private Counterpart? Copyright and the Firms' Own IPR Protection in a Software Duopoly," CERGE-EI Working Papers wp518, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    4. Joachim Freyberger & Bradley J. Larsen, 2022. "Identification in ascending auctions, with an application to digital rights management," Quantitative Economics, Econometric Society, vol. 13(2), pages 505-543, May.
    5. Ming-Fang Tsai & Jiunn-Rong Chiou, 2012. "Counterfeiting, enforcement and social welfare," Journal of Economics, Springer, vol. 107(1), pages 1-21, September.
    6. Éric Darmon & Thomas Le Texier, 2014. "Private or Public Law Enforcement? The Case of Digital Piracy Policies with Non-monitored Illegal Behaviors," Economics Working Paper Archive (University of Rennes & University of Caen) 201403, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    7. Dyuti S. Banerjee, 2014. "Effectiveness of government anti-piracy enforcement policy: commitment versus non-commitment," Chapters, in: Richard Watt (ed.), Handbook on the Economics of Copyright, chapter 15, pages 264-284, Edward Elgar Publishing.
    8. Tsai, Ming-Fang & Chiou, Jiunn-Rong & Lin, Chun-Hung A., 2012. "A model of counterfeiting: A duopoly approach," Japan and the World Economy, Elsevier, vol. 24(4), pages 283-291.
    9. Chang, Yang-Ming & Walter, Jason, 2015. "Digital piracy: Price-quality competition between legal firms and P2P network hosts," Information Economics and Policy, Elsevier, vol. 31(C), pages 22-32.
    10. Tunay I. Tunca & Qiong Wu, 2013. "Fighting Fire with Fire: Commercial Piracy and the Role of File Sharing on Copyright Protection Policy for Digital Goods," Information Systems Research, INFORMS, vol. 24(2), pages 436-453, June.
    11. Kresimir Zigic & Jiri Strelicky & Michal Kunin, 2020. "Private and Public IPR Protection in a Vertically Differentiated Software Duopoly," CERGE-EI Working Papers wp671, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    12. Carsten Fink & Keith E. Maskus & Yi Qian, 2016. "The Economic Effects of Counterfeiting and Piracy: A Review and Implications for Developing Countries," The World Bank Research Observer, World Bank, vol. 31(1), pages 1-28.
    13. Kresimir Zigic & Jiri Strelicky & Michael Kunin, 2015. "Modeling Software Piracy Protection: Monopoly versus Duopoly," CERGE-EI Working Papers wp551, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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