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Competition and collusion in software market in the presence of piracy
Abstract:
Software piracy is claimed to be one of the biggest problems for the software industry. Several international organizations have been formed to overcome this problem and protect the companies’ rights. On the other hand there exist methods which could possibly eliminate piracy and its undesirable consequences. This leads to intriguing questions like why the piracy still exists and why the big rumble around it?
Economists have claimed that one explanation for the existence of software piracy is the network effect in this market. Current article goes further and tries to explain the possible reasons for the existence of the organizations that fight against piracy. The most intriguing finding of the article is that the formation of organizations that protect producer’s intellectual property rights, can be seen as collusive behavior of software companies and therefore action of antitrust regulators may be needed.
Download: Draft version from July 2004 (pdf, 300 KB). |
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