A BEJEAP Contributions article.

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.

Submitted: August 7, 2003 · Accepted: December 4, 2003 · Published: September 28, 2004

Originally published in Contributions to Economic Analysis & Policy.

Recommended Citation

Ben-Shahar, Danny and Jacob, Assaf (2004) "Selective Enforcement of Copyright as an Optimal Monopolistic Behavior," Contributions to Economic Analysis & Policy: Vol. 3 : Iss. 1, Article 18.
Available at: http://www.bepress.com/bejeap/contributions/vol3/iss1/art18