nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2013‒05‒19
three papers chosen by
Giovanni Ramello
Universita' Amedeo Avogadro

  1. Pricing information goods with piracy and heterogeneous consumers By Waters, James
  3. Defensive Disclosure under Antitrust Enforcement By Ajay Bhaskarabhatla; Enrico Pennings

  1. By: Waters, James
    Abstract: We present an information good pricing model with persistently heterogeneous consumers and a rising marginal propensity for them to pirate. Three offsetting pricing mechanisms occur: skimming, compressing price changes, and delaying product launch. We identify a novel trade off in piracy's effect on welfare. We find that piracy quickens sales times and raises welfare in fixed capacity markets, and does the opposite in growing markets. In our model, consumers benefit from piracy except at very high rates in rapidly expanding markets, legal sellers always dislike it, and pirate providers like high but not very high rates. Purchase delay, transient heterogeneity, inelastic demand, and network externalities reduce piracy's effect, but demand uncertainty doesn't.
    Keywords: Information goods; software; piracy; skimming; intertemporal price discrimination; prices; pricing; welfare
    JEL: D60 L11 L86
    Date: 2013–05–12
  2. By: Sunil Kanwar (Department of Economics, Delhi School of Economics, Delhi, India)
    Abstract: This paper studies the innovation, production efficiency and productivity responses to the stronger protection of intellectual property post-Trade Related Intellectual Property Rights (TRIPs) agreement, with specific reference to manufacturing industry in the BRIC economy of India. Using the fact that the post-TRIPs strengthening of intellectual property rights in developing countries was largely exogenous, we are able to correct for any endogeneity biases that may obtain in the estimation. Using a large panel data set for Indian firms in the manufacturing sector spanning the period 1995-2011, we find that intellectual property reform is associated with a significant increase in the rates of technical change, production efficiency change, and productivity growth. Thus, the annual rate of technological growth spurted by about 3 percentage points or more, production efficiency grew by almost 8 percentage points, and consequently total factor productivity growth accelerated by about 0.8 percentage points in the post-reform period. This holds promise for other similar reforming countries, and helps to set at rest the misgivings one might have for the tightening of intellectual property protection.
    Keywords: Innovation, Efficiency, Productivity, IPRs
    JEL: O34 O33 O31 O11
    Date: 2013–04
  3. By: Ajay Bhaskarabhatla (Erasmus University Rotterdam); Enrico Pennings (Erasmus University Rotterdam)
    Abstract: We formulate a simple model of optimal defensive disclosure by a monopolist facing uncertain antitrust enforcement and test its implications using unique data on defensive disclosures and patents by IBM during 1955-1989. Our results indicate that stronger antitrust enforcement leads to more defensive disclosure, that quality inventions are disclosed defensively, and that defensive disclosure served as an alternative but less successful mechanism to patenting at IBM in appropriating returns from R&D.
    Keywords: Antitrust, Defensive Disclosure, Patent, IBM
    JEL: K21 L40 M10 O32 O34
    Date: 2012–02–09

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