Does reliable pirated product lead to more piracy?

aut.publication.placeAuckland, New Zealand
aut.researcherPoddar, Sougata
dc.contributor.authorLu, Y
dc.contributor.authorPoddar, S
dc.date.accessioned2013-01-28T22:18:40Z
dc.date.available2013-01-28T22:18:40Z
dc.date.copyright2012
dc.date.issued2012
dc.description.abstractConventional wisdom would suggest if a pirated product, which is cheaper than the original product, becomes more reliable then the relative demand of the pirated product or the rate of piracy will increase when consumers have different willingness to pay. However, is this always true? We address this question in a framework where the original product developer makes costly investment to deter pirate(s) in a given regime of IPR protection. We show that the relationship between the rate of piracy and the reliability of the pirated product depends on the nature of the pirate as well as on the nature of the market competition if the pirate is commercial. Under commercial piracy, when the original firm and the pirate compete in quantities, the conventional wisdom holds i.e. the more reliable the pirated product, the higher is the rate of piracy. However, the relationship is non-monotonic, hence the wisdom does not hold when they compete in prices or the pirates are the end-users.
dc.identifier.citationVersion 12/05. Department of Economics Working Paper Series, AUT University.
dc.identifier.urihttps://hdl.handle.net/10292/5092
dc.publisherDepartment of Economics, AUT University
dc.relation.ispartofseriesDepartment of Economics Working Paper Series
dc.relation.urihttp://www.aut.ac.nz/__data/assets/pdf_file/0010/299647/WP-2012-05-new.pdf
dc.rightsAuckland University of Technology (AUT) encourages public access to AUT information and supports the legal use of copyright material in accordance with the Copyright Act 1994 (the Act) and the Privacy Act 1993. Unless otherwise stated, copyright material contained on this site may be in the intellectual property of AUT, a member of staff or third parties. Any commercial exploitation of this material is expressly prohibited without the written permission of the owner.
dc.rights.accessrightsOpenAccess
dc.subjectIPR protections
dc.subjectPrice competition
dc.subjectQuantity competition
dc.subjectProduct quality
dc.titleDoes reliable pirated product lead to more piracy?
pubs.elements-id135029
pubs.organisational-data/AUT
pubs.organisational-data/AUT/Business & Law
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