A theoretical analysis of product versioning in the context of commercial piracy
The study develops a vertically differentiated duopoly model in the presence of commercial piracy with two groups of consumers, a business group and a home group, with the former having higher willingness to pay for the product. A firm producing an original information good sells it with...
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Faculty of Economics, Belgrade
2018-01-01
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doaj-319c02768fed4332989fb368935765de2020-11-25T00:16:05ZengFaculty of Economics, BelgradeEkonomski Anali0013-32641820-73752018-01-016321911513510.2298/EKA1819115B0013-32641819115BA theoretical analysis of product versioning in the context of commercial piracyBasu Paulomi0Banerjee Tanmoyee1Jadavpur University, Department of Economics, IndiaJadavpur University, Department of Economics, IndiaThe study develops a vertically differentiated duopoly model in the presence of commercial piracy with two groups of consumers, a business group and a home group, with the former having higher willingness to pay for the product. A firm producing an original information good sells it with endogenously chosen product quality and acts as a price leader, and the commercial pirate becomes the price follower. There exists a stringent government policy of monitoring commercial piracy, which increases the marginal cost of the pirate. We study and compare the two regimes of no-versioning (selling a single quality product) and product versioning (selling products with different price and quality combinations to different consumer groups). In the versioning regime, depending upon demand and government monitoring parameters, two equilibria are observed. Comparing the original firm’s profit in each of these versioning cases suggests that versioning may or may not be the original firm’s optimal strategy in the presence of commercial piracy. This result is counterintuitive to existing literature on product versioning in the context of enduser piracy.http://www.doiserbia.nb.rs/img/doi/0013-3264/2018/0013-32641819115B.pdfintellectual property rightproduct-versioningcommercial piracyheterogeneityquality |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Basu Paulomi Banerjee Tanmoyee |
spellingShingle |
Basu Paulomi Banerjee Tanmoyee A theoretical analysis of product versioning in the context of commercial piracy Ekonomski Anali intellectual property right product-versioning commercial piracy heterogeneity quality |
author_facet |
Basu Paulomi Banerjee Tanmoyee |
author_sort |
Basu Paulomi |
title |
A theoretical analysis of product versioning in the context of commercial piracy |
title_short |
A theoretical analysis of product versioning in the context of commercial piracy |
title_full |
A theoretical analysis of product versioning in the context of commercial piracy |
title_fullStr |
A theoretical analysis of product versioning in the context of commercial piracy |
title_full_unstemmed |
A theoretical analysis of product versioning in the context of commercial piracy |
title_sort |
theoretical analysis of product versioning in the context of commercial piracy |
publisher |
Faculty of Economics, Belgrade |
series |
Ekonomski Anali |
issn |
0013-3264 1820-7375 |
publishDate |
2018-01-01 |
description |
The study develops a vertically differentiated duopoly model in the presence
of commercial piracy with two groups of consumers, a business group and a
home group, with the former having higher willingness to pay for the
product. A firm producing an original information good sells it with
endogenously chosen product quality and acts as a price leader, and the
commercial pirate becomes the price follower. There exists a stringent
government policy of monitoring commercial piracy, which increases the
marginal cost of the pirate. We study and compare the two regimes of
no-versioning (selling a single quality product) and product versioning
(selling products with different price and quality combinations to different
consumer groups). In the versioning regime, depending upon demand and
government monitoring parameters, two equilibria are observed. Comparing the
original firm’s profit in each of these versioning cases suggests that
versioning may or may not be the original firm’s optimal strategy in the
presence of commercial piracy. This result is counterintuitive to existing
literature on product versioning in the context of enduser piracy. |
topic |
intellectual property right product-versioning commercial piracy heterogeneity quality |
url |
http://www.doiserbia.nb.rs/img/doi/0013-3264/2018/0013-32641819115B.pdf |
work_keys_str_mv |
AT basupaulomi atheoreticalanalysisofproductversioninginthecontextofcommercialpiracy AT banerjeetanmoyee atheoreticalanalysisofproductversioninginthecontextofcommercialpiracy AT basupaulomi theoreticalanalysisofproductversioninginthecontextofcommercialpiracy AT banerjeetanmoyee theoreticalanalysisofproductversioninginthecontextofcommercialpiracy |
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