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Copyright Protection And Innovation In The Presence Of Commercial Piracy

Author

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  • Dyuti S. Banerjee
  • Teyu Chou

Abstract

This paper uses a strategic entry-deterrence approach to address the effects of anti-commercial piracy policies on a firm’s incentive to innovate. Monitoring increases the firm’s incentive to innovate. However, inclusion of innovation does not necessarily result in monitoring as the socially optimal policy. If monitoring is the socially optimal policy then the commercial pirate’s entry may or may not be deterred. The entry-deterring limit price and quality is less than that in the monopoly case. Only in the extreme situation the monopoly results are restored.

Suggested Citation

  • Dyuti S. Banerjee & Teyu Chou, 2007. "Copyright Protection And Innovation In The Presence Of Commercial Piracy," Monash Economics Working Papers 05-07, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2007-05
    as

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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2007/0507copyrightdyutiteyu.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Accommodating strategy; aggressive strategy; copyright protection; innovation.;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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