Original scientific paper
https://doi.org/10.1080/1331677X.2022.2086149
On Jain’s digital piracy model: horizontal vs vertical product differentiation
Michael Kúnin
Krešimir Žigić
Abstract
We study how private intellectual property rights protection
affects equilibrium prices in a duopoly competition between firms
that offer a product variety of distinct qualities (vertical product
differentiation) in a setup that is closely related to that put forward
by Jain where firms offer the same qualities in equilibrium
(horizontal product differentiation). Consumers may make a
choice to buy a legal version, use an illegal copy (if they want to
and can), or not use a product at all. Using an illegal version violates
intellectual property rights protection and is thus punishable
when discovered. Thus, both private and public (copyright) intellectual
property rights protection are available on scene.
Keywords
Vertical and horizontal product differentiation; Software Piracy; Bertrand competition; Private and public intellectual property rights protection
Hrčak ID:
303787
URI
Publication date:
31.3.2023.
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