Piracy as Strategy? A Reexamination of Product Piracy

TL;DRAbstract

(WP 08/04 Clave pdf) To explore the impact that piracy has on demand for legal versions of a product and firm performance, we use the literatures of information economics and strategic management to expand the analysis of piracy to markets other than software. Our paper helps clarify the nature of customer demand for legal versions of products, and gain a deeper understanding of the way that piracy can enhance the performance of those firms that own the intellectual property. We contend that although piracy represents unauthorized imitation of a firm’s intellectual property, there are some circumstances when piracy can improve the value of the intellectual property.

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