Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Information Goods Pricing and Copyright Enforcement: Welfare Analysis

Information Goods Pricing and Copyright Enforcement: Welfare Analysis We consider how the government should set the fine for copying, tax on copying medium, and subsidy on legitimate purchases, whereas a monopoly publisher sets price and spending on detection. There are two segments of potential software users—ethical users who will not copy, and unethical users who would copy if the benefit outweighs the cost. In deciding on policy, the government must consider how the publisher adjusts price and detection to changes in the fine, tax, and subsidy. Our key welfare result is that increases in detection affect welfare more negatively than price cuts. We also show that the tax is welfare superior to the fine, and that a subsidy is optimal. Generally, government policies that focus on penalties alone will miss the social welfare optimum. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Information Systems Research INFORMS

Information Goods Pricing and Copyright Enforcement: Welfare Analysis

Chen, Yeh-ning; Png, Ivan
Information Systems Research , Volume 14 (1): 17 – Mar 11, 2003
Download PDF
17 pages

Loading next page...
 
/lp/informs/information-goods-pricing-and-copyright-enforcement-welfare-analysis-bFLGI2Cvdi

References (38)

Publisher
INFORMS
Copyright
Copyright © INFORMS
Subject
Research Article
ISSN
1047-7047
eISSN
1526-5536
DOI
10.1287/isre.14.1.107.14762
Publisher site
See Article on Publisher Site

Abstract

We consider how the government should set the fine for copying, tax on copying medium, and subsidy on legitimate purchases, whereas a monopoly publisher sets price and spending on detection. There are two segments of potential software users—ethical users who will not copy, and unethical users who would copy if the benefit outweighs the cost. In deciding on policy, the government must consider how the publisher adjusts price and detection to changes in the fine, tax, and subsidy. Our key welfare result is that increases in detection affect welfare more negatively than price cuts. We also show that the tax is welfare superior to the fine, and that a subsidy is optimal. Generally, government policies that focus on penalties alone will miss the social welfare optimum.

Journal

Information Systems Research – INFORMS

Published: Mar 11, 2003

Keywords: Keywords : copyright ; pricing ; enforcement

There are no references for this article.