nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2021‒10‒18
one paper chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. A Note on Jain´s Digital Piracy Model: Horizontal vs Vertical Product Differentiation By Michael Kunin; Kresimir Zigic

  1. By: Michael Kunin; Kresimir Zigic
    Abstract: We study how private intellectual property rights protection affects equilibrium prices and profits in a duopoly competition between firms that offer a product variety of distinct qualities (vertical product differentiation) in a setup that is closely related to that put forward by Jain (2008), where firms offer the same qualities in equilibrium (horizontal product differentiation). Consumers may make a choice to buy a legal version, use an illegal copy (if they want to and can), or not use a product at all. Using an illegal version violates intellectual property rights protection and is thus punishable when disclosed. Thus, both private and public (copyright) intellectual property rights protection are available on scene.
    Keywords: vertical and horizontal product differentiation; software piracy; Bertrand competition; private and public intellectual property rights protection;
    JEL: D43 L11 L21 O25 O34
    Date: 2021–08

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