Monopoly, Piracy and network value

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Abstract

This paper presents a model for the consumption of a cultural good where consumers can either purchase or pirate the good (or not consume it). Because of the specificity of the cultural good, active consumers (users), buyers and pirates, derive a network utility that depends on the numbers of users of the goods with which they can share their experience of the cultural good. It is shown that the monopoly firm selling the cultural good may obtain a higher profit when piracy is possible than when it is not. Consequently, it is presented that increasing the cost of piracy has a non monotonic effect on a firm's profit and welfare.

Versions

➤  Version 1 (2020-08-03)

Citation

Diomides Mavroyiannis (2020). Monopoly, Piracy and network value. Researchers.One, https://researchers.one/articles/monopoly-piracy-and-network-value/5f52699d36a3e45f17ae7e98/v1.

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