Digital piracy and firms’ strategic interactions: The effects of public copy protection and DRM similarity

Choi, Pilsik; Bae, Sang Hoo; Jun, Jongbyung

doi:10.1016/j.infoecopol.2010.10.001

Cited by 27 publications

(18 citation statements)

References 12 publications

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“…More recent papers by Choi et al (2010) and Belleflamme and Picard (2007) extend the analysis to a duopoly in which two innovators are competing not only against each other, but also pirates. The analysis in the current paper builds on this model of piracy as this represents well the nature of the IP protection issue facing breeders seeking to reduce illegal reproduction of their seed, or similarly policy options to render illegal such reproduction by farmers.…”

Section: Introductionmentioning

confidence: 99%

Innovation and IPRs for Agricultural Crop Varieties as Intermediate Goods

Eaton¹

2013

SSRN Journal

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This paper analyzes the effects of varying appropriability or strength of IPRs for agricultural seeds. The paper is motivated by the agricultural sector in which an innovator uses genetic resources to produce new crop varieties to be marketed to a farm sector that exhibits heterogeneity in its ability to profit from the innovation. Farmers are modelled as heterogeneous producers, purchasing seed from an innovating monopolist in a vertical product differentiation framework. The effects of IPRs on innovation are endogenized and the welfare of consumers assessed through the price for food. The theoretical analysis reveals some novel aspects of the traditional innovation versus diffusion tradeoff. Less productive producers, and also consumers, are better off with a moderate level of appropriability and lower level of innovation. The model is extended to a two country setting consisting of North and South.

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Section: Introductionmentioning

confidence: 99%

Innovation and IPRs for Agricultural Crop Varieties as Intermediate Goods

Eaton¹

2013

SSRN Journal

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“…Besides the different focus (direct versus indirect competition), the other key difference between ours and the set-up of Belleflamme and Picard (2007) and Choi, Bae, and Jun (2010) is that in their settings the original products have the same quality, while in our set-up, the original products are vertically differentiated and thus have distinct qualities to begin with. Moreover, since we focus on the software market, we do not allow for a different copying technology as it is usual in the case with multiple, initially independent digital products.…”

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confidence: 98%

“…Following the approach of Belleflamme and Picard (2007), Choi, Bae, and Jun (2010) use 6 a Hotelling horizontal differentiation model as well and analyze the situation in which also the interdependence between the firms stems from their strategies against piracy rather than from direct competition on prices. They, like we do, consider the IPR efforts of the firms to be endogenous variables and study the interaction between public and private protection against piracy.…”

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confidence: 99%

“…Moreover, since we focus on the software market, we do not allow for a different copying technology as it is usual in the case with multiple, initially independent digital products. Thus, the cost of consuming illegal copies is constant in our setting, while it may be decreasing with the number of different originals copied in the settings of Belleflamme and Picard (2007) and Choi, Bae, and Jun (2010).…”

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confidence: 99%

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Intellectual Property Rights Protection and Enforcement in a Software Duopoly

Strelicky

Žigić

2011

SSRN Journal

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ISBN 978-80-7343-236-2 (Univerzita Karlova. Centrum pro ekonomický výzkum a doktorské studium) ISBN 978-80-7344-226-2 (Národohospodářský ústav AV ČR, v.v.i.) AbstractWe study the economic impacts of the interaction between a regulator's Intellectual Property Rights (IPR) protection policy against software piracy on the one side and the forms of IPR protection that software producers may themselves undertake to protect their intellectual property on the other side. Two developers, each offering a variety of different quality, compete for heterogeneous users who choose among purchasing a legal version, using an illegal copy, and not using a product at all. Using an illegal version violates IPR and is thus punishable when disclosed. If a developer considers the level of piracy as high, he can either introduce a form of physical protection for his product or introduce a protection in the form of restricting support and other services to illegal users. The quality of each developer's product is exogenously given, and the developers compete in prices. We examine the above issues within the framework of Bertrand and Stackelberg competition while the monopoly set-up serves as a point of reference.Abstrakt V našemčlánku se zabýváme interakcí mezi ochranou duševních práv (IPR) prováděnou regulátorem a mezi ochranou díla proti kopírování, která je implementována softwarovou firmou, a to vše analyzujeme v závislosti na zvoleném způsobu ochrany. Na trhu jsou dvě softwarové firmy, které nabízejí software rozdílné kvality, a soutěží o heterogenní uživatele, kteří si vybírají mezi legálním používáním softwaru, nelegálním užitím a celkovým nepoužíváním. Používání nelegální verze porušuje ochranu duševních práv a v případě odhalení následuje pokuta. Pokud softwarová firma vnímáúroveň softwarového pirátství na trhu jako příliš velkou, může zavést vlastní formu ochrany svých produktů nebo může zavést omezení nelegálním uživatelům na své podpůrné služby. Kvalita produktů od každé softwarové firmy je exogenně dána a firmy proti sobě soutěží pouze cenami. Včlánku rozebíráme výše zmiňovaný koncept v Bertrand a Stackelberg soutěži, zatímco koncept monopolu slouží jen k porovnání.

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“…They find that the two piracy-mitigating approaches are substitutes for each other. Choi et al [8] explore how public copyright protection and DRM protection similarity affects the optimal DRM protection levels of duopolistic digital content producers. Avinadav et al [3] investigate firm pricing and DRM protection strategies in a two-echelon retail channel by considering demand uncertainty under different profit criteria and different Stackelberg leaders.…”

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confidence: 99%

Managing piracy: Dual-channel strategy for digital contents

Chai¹,

Ren²,

Zhang³

2022

JIMO

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The Internet offers digital content disc producers the opportunities to design dual channels by introducing an online-direct store alongside traditional retail stores, but also leads related firms to suffer significant piracy problems. Using a game-theoretic framework, we explore dual-channel marketing optimality as a piracy-mitigating strategy for digital content sold in the physical disc format. We construct a price-setting game between a digital content producer and its independent retailer(s) in a pirated market by endogenizing the producer's copyright protection investments. We show that dual-channel marketing, a complement or a substitute for conventional copyright protection, can strategically mitigate the piracy level by increasing the equal-size retail sales volume. We also investigate how firms' pricing strategies and profits are influenced by the endogenous interaction of dual-channel marketing and copyright protection. We unexpectedly find that in a pirated market with insufficient copyright protection, dual-channel marketing can simultaneously raise firm pricing and sales volumes when the producer sells through a monopolistic retailer. We also identify the conditions under which dual-channel marketing can mitigate profit losses caused by piracy for the producer and the retailer(s). Unlike previous research which shows that dual-channel marketing benefits the producer and the monopolistic retailer because it mitigates double marginalization, in the pirated market, this win-win outcome occurs even if accompanied by aggravated double marginalization. Moreover, dual-channel marketing can mitigate all the firms' profit losses caused by piracy only when it can complement conventional copyright protection, i.e., when the producer sells through a monopolistic retailer or duopolistic retailers. In each situation, counter-intuitively, as copyright protection becomes increasingly costly, although the retailer(s) is (are) more willing to accept dual-channel marketing, the producer has a decreased incentive to design such sales channels.

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Digital piracy and firms’ strategic interactions: The effects of public copy protection and DRM similarity

Cited by 27 publications

References 12 publications

Innovation and IPRs for Agricultural Crop Varieties as Intermediate Goods

Innovation and IPRs for Agricultural Crop Varieties as Intermediate Goods

Intellectual Property Rights Protection and Enforcement in a Software Duopoly

Managing piracy: Dual-channel strategy for digital contents

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