DURABILITY CHOICE AND THE PIRACY FOR PROFIT OF GOODS
We explore the impact of durable goods piracy in a simple two-period durability choice setting where an originator faces a future for-profit pirate that clones or duplicates copies of the durable good. We find that a social planner, as well as a monopoly originator, may well engage in a sort of 'reversed planned obsolescence'. In other words, they manufacture a product that is more durable than the first-best cost-minimizing level, if they cannot directly control the pirate. We show this occurs even in rental or committed sales settings, indicating Swan's market independence result does not hold here. Copyright © 2009 The Author. Journal compilation © 2009 Blackwell Publishing Ltd.
Year of publication: |
2010
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Authors: | Goering, Gregory E. |
Published in: |
Metroeconomica. - Wiley Blackwell, ISSN 0026-1386. - Vol. 61.2010, 2, p. 282-301
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Publisher: |
Wiley Blackwell |
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