Dyuti S. Banerjee

Software piracy: a strategic analysis and policy instruments

Abstract We examine the government’s role in restricting commercial piracy in a software market. Welfare maximization may or may not result in monitoring as the socially optimal outcome. Correspondingly, either monopoly situation or market sharing between an original firm and a pirate are subgame perfect equilibria. If it is profitable for a monopolist to prevent piracy by installing a protective device, then not monitoring is the equilibrium. We also discuss the effects of network externalities, in addition to deriving the effects of changes in the reliability of the pirated software and network benefits on the policy variables, the extent of piracy, and the monopolist’s incentive to prevent piracy.

Socio-economic development and software piracy. An empirical assessment

The high rate of software piracy is a growing concern for software developers as well as businesses and governments. It is argued here that the piracy rate is influenced by expected benefits and costs to the pirates. A model is developed using a set of variables that may affect such benefits and costs and hence piracy rate in a country, and tested for a large sample of 53 countries. The results of this paper suggest that the existing socio-economic conditions and the lack of proper institutions in developing and emerging economies may be responsible for high software piracy rates. One may, therefore, infer that the current trends of globalization and socio-economic development may help software piracy in developing countries.

The impact of piracy on innovation in the presence of technological and market uncertainty

This paper analyses the effect of piracy on innovation in the presence of R&D competition with technological and market uncertainty. With a single innovating firm facing technological uncertainty, piracy unambiguously retards innovation. However, with R&D competition where firms face market and technological uncertainties, we show that piracy may enhance overall innovation. We also show that if the difference between the probabilities of success of the innovating firms is relatively large then piracy enhances the R&D investment and profit of the less efficient firm.

OPTIMAL ENFORCEMENT AND ANTI‐COPYING STRATEGIES TO COUNTER COPYRIGHT INFRINGEMENT*

In this paper we study the mix of anti-copying investment strategies by an incumbent firm and the enforcement policies of a government that consists of monitoring and penalizing the copier to address the issue of commercial piracy. If monitoring is socially optimal then the subgame perfect equilibrium anti-copying investment does not guarantee the prevention of copying. If not monitoring is socially optimal then the subgame perfect equilibrium anti-copying investment may guarantee the prevention of copying.

Earnings inequality in Singapore

Based on the data on earnings distributions from the national labour force surveys of 1974-98, trends in income inequality are studied. Of particular note are the findings from the Paglin Gini and Theil decompositions. The former show that behind an invariant overall Gini ratio lies a declining inter-age disparity and growing P-Gini. From the latter, it is found that inter-age and inter-educational disparities have respectively contributed some 12 per cent and 34 per cent to overall inequality. It is found that inter-occupational inequality, as measured by the Theil index, almost doubled in the period. This is in sharp contrast to trends in inter-educational activity, thus illustrating that the education-occupation linkage is not clear-cut.

Does Tariff Induce Intellectual Property Right Protection and Reduce Incidence of Piracy

We consider a model with North exporting a copyrighted product to South where there is IPR violation, and South exports a basic good to North. We examine the impact of Norths imposition of import tariff on Souths monitoring of IPR violation and the incidence of piracy. If South values IPR compliance “lowly”, then tariff imposition do not alter the pre-tariff no monitoring equilibrium outcome but unambiguously raises the incidence of piracy. If IPR compliance is valued “highly” then tariff either switches the equilibrium outcome from not monitoring to monitoring or increases its rate. However, the incidence of piracy may increase.