Does Copyright Enforcement Encourage Piracy?
18 Pages Posted: 2 Dec 2000 Last revised: 12 Oct 2015
Date Written: August 1, 2001
Abstract
More intensive copyright enforcement reduces piracy, raises prices, and lowers consumer surplus. We show that these results do not hold regarding the extent rather than intensity of enforcement. When enforcement is targeted at high-value buyers such as corporate and government users, the copyright holder has an incentive to charge super-monopoly prices, thereby encouraging piracy among low-value buyers. Extending enforcement down the demand curve broadens the copyright holder's captive market, leading to lower prices and higher sales that can increase both profits and consumer surplus. The standard tradeoff between the incentive to generate intellectual property and the cost of monopoly power is therefore avoided. New technologies which lead to stronger control over illicit use can paradoxically benefit consumers.
Keywords: piracy, internet, intellectual property, copyright protection
JEL Classification: K11, K42, L86
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Piracy of Digital Products: A Critical Review of the Theoretical Literature
By Martin Peitz and Patrick Waelbroeck
-
Piracy of Digital Products: A Critical Review of the Economics Literature
By Martin Peitz and Patrick Waelbroeck
-
The Effect of Internet Piracy on Cd Sales: Cross-Section Evidence
By Martin Peitz and Patrick Waelbroeck
-
The Effect of Internet Piracy on Music Sales: Cross-Section Evidence
By Martin Peitz and Patrick Waelbroeck
-
An Economist's Guide to Digital Music
By Martin Peitz and Patrick Waelbroeck
-
Why the Music Industry May Gain from Free Downloading - the Role of Sampling
By Martin Peitz and Patrick Waelbroeck
-
Rockonomics: The Economics of Popular Music
By Marie Connolly and Alan B. Krueger
-
The Elusive Symbiosis: The Impact of Radio on the Record Industry