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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Mendola, Mariapia / Requate, Till / Tsui, Kevin / Wichardt, Philipp / Zulehner, Christine

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Selective Enforcement of Copyright as an Optimal Monopolistic Behavior

Danny Ben-Shahar1 / Assaf Jacob2

1The Interdisciplinary Center,

2IDC,

Citation Information: Contributions in Economic Analysis & Policy. Volume 3, Issue 1, ISSN (Online) 1538-0645, DOI: 10.2202/1538-0645.1189, September 2004

Publication History

Published Online:
2004-09-28

Abstract

We present a perfect Nash equilibrium in which the creator of a work, motivated by economic considerations, selectively enforces her own copyright. In fact, the creator may not only permit, but may strategically promote infringement of the copyright, thereby participating indirectly in predatory pricing, and so raising barriers to entry. Our model is highly applicable to the software industry, where relatively high entry costs and the relatively low cost of copyright infringement make this phenomenon likely. We further show the conditions under which exogenous intervention, through intensive enforcement of copyrights, increases social welfare. Finally, we explore some potential strategies for such legal intervention.

Keywords: Antitrust; Copyright; Predatory Pricing; Monopoly; Microsoft; Nash Equilibrium; Price Discrimination

Citing Articles

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[1]
Thorsten Staake, Frédéric Thiesse, and Elgar Fleisch
European Journal of Marketing, 2009, Volume 43, Number 3/4, Page 320
[2]
Alessandro Brun, Iolanda D'Amato, and Thanos Papadimitriou
International Journal of Retail & Distribution Management, 2013, Volume 41, Number 11/12, Page 986

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