On Jain’s digital piracy model: horizontal vs vertical product differentiation

0582638 - NHU-C 2024 RIV HR eng J - Journal Article
Kúnin, M. - Žigić, Krešimir
On Jain’s digital piracy model: horizontal vs vertical product differentiation.
Ekonomska Istrazivanja. Roč. 36, č. 1 (2023), s. 1299-1316. ISSN 1331-677X. E-ISSN 1848-9664
Institutional support: Cooperatio-COOP
Keywords : vertical and horizontal product differentiation * software piracy * Bertrand competition
OECD category: Applied Economics, Econometrics
Impact factor: 3.080, year: 2021
Method of publishing: Open access
https://doi.org/10.1080/1331677X.2022.2086149

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.
Permanent Link: https://hdl.handle.net/11104/0350715