Competition with clone: an analysis of the role of illegal copy
- 46 Downloads
The efficiency of a market depends on the amount of information about products available to buyers. However, an information goods market is not an efficient market because information goods are mostly experience goods. We suggest that illegal copying can be an efficient information channel to account for the problem. We also suggest that partially enforced copyright protection may encourage the competition between the original information goods and illegally copied goods that benefits not only customers but also producers.
KeywordsIllegal copy Intellectual property right Information asymmetry
- 1.Arrow, K. J. (1971). Economic welfare and the allocation of resources for invention. In: D. M. Lamberton (Ed.), Economics of information and knowledge. Baltimore: Penguin Books.Google Scholar
- 5.Takeyama, L. N. (1994). The welfare implications of unauthorized reproduction of intellectual property in the presence of demand network externalities. Journal of Industrial Economics, 17, 155–166.Google Scholar