Impact of Piracy on Innovation at Software Firms and Implications for Piracy Policy

A Business software alliance (BSA) commissioned study in 2006, found that $34 billion was lost due to piracy of software in 2005. The BSA and its members invest significant resources in educating users about copyright, its value, and enforcing copyright laws. However, does effort spent in educating users about the harmful aspects of piracy, and taking action against end-users using pirated software always result in higher quality software? In this paper, we look at how innovation in the presence of piracy is affected by the policy choice of alliances such as the BSA. Surprisingly, we find that a stricter piracy policy, that increases the perceived cost to using pirated software for end-users, may in some cases lead to an increase in piracy (demand for pirated products), and a decrease in product quality. Thus an active BSA that tries to educate consumers and takes legal action against consumers, may actually be promoting piracy and hurting innovation in some cases. An intuitive rationale for this is that, in some regions, quality choice by the firm and the policy choice by the BSA are strategic substitutes in the fight against piracy. Thus an increase in the policy variable by the BSA, makes the firm choose a lower quality. Depending on the likelihood that the pirated product is functional, the BSA would choose a piracy policy ranging from an inactive to a very active policy

Solving the Social Dilemma with Equilibrium Data Harvesting Strategies: A Game-Theoretic Approach

Social media platforms generate huge profits from targeted advertising by collecting massive amounts of data from their users, usually referred to as data harvesting. However, practitioners from the social media industry suggest that data harvesting hurts users by promoting social media addiction and the spread of misinformation. Therefore, policymakers have recently been considering regulating social media platforms. This paper investigates how imposing the regulation on data harvesting impacts social media platforms and users by developing a game-theoretic model. Our main finding shows that while the objective of the regulation on data harvesting is to discourage platforms from collecting a massive amount of data from the users, imposing the regulation may sometimes increase the data harvesting levels and profits of social media platforms. We contribute to the Information Systems literature by broadening the knowledge of the impact of the government\u27s regulation on social media platforms and users

Digital piracy : theory

This article reviews recent theoretical contributions on digital piracy. It starts by elaborating on the reasons for intellectual property protection, by reporting a few facts about copyright protection, and by examining reasons to become a digital pirate. Next, it provides an exploration of the consequences of digital piracy, using a base model and several extensions (with consumer sampling, network effects, and indirect appropriation). A closer look at market-structure implications of end-user piracy is then taken. After a brief review of commercial piracy, additional legal and private responses to end-user piracy are considered. Finally, a quick look at emerging new business models is taken.information good, piracy, copyright, IP protection, internet, peer-to-peer, software, music

Digital Piracy: Theory

This article reviews recent theoretical contributions on digital piracy. It starts by elaborating on the reasons for intellectual property protection, by reporting a few facts about copyright protection, and by examining reasons to become a digital pirate. Next, it provides an exploration of the consequences of digital piracy, using a base model and several extensions (with consumer sampling, network effects, and indirect appropriation). A closer look at market-structure implications of end-user piracy is then taken. After a brief review of commercial piracy, additional legal and private responses to end-user piracy are considered. Finally, a quick look at emerging new business models is taken.information good, piracy, copyright, IP protection, internet, peer-to-peer, software, music

Regional innovation policy and economic development: the case of Wales

This thesis presents a case study of Welsh innovation policy from the period of political devolution (1999) to the present day (2014), exploring the role of regional government as a driver of innovation and economic development. It proposes a multi-theoretical framework to be employed in the study of real world innovation interventions, to illicit nuanced insights into the Wales case study, and also to test the applicability of key regional innovation theories in a weaker region context. The four regional innovation theories identified as the most prominent in both academic literature and policy, and incorporated into the conceptual framework of this study are: systems of innovation, clusters, the learning region, and the triple helix. The case study presented consists of a systematic review of Welsh innovation and related policy since devolution and in-depth interviews with key stakeholders in the Welsh innovation system. The Welsh approach to innovation is found to have evolved in three distinct phases, whereby innovation is prioritised differently relative to other policy spheres, and the dominant approach to innovation varies over time. Innovation interventions have met with varying levels of success, and, interestingly, the most prominent approaches have been, on the whole, less successful in Wales. This thesis argues that no one theory is ideally suited to the analysis and development of innovation policy in weaker regions; instead it draws on the strengths of the four key theories identified. It argues against a “one-size-fits-all” approach to innovation policy, premised on exporting models from exceptional leading regions in a manner that is geographically, historically, and culturally blind. It supports a move away from normative approaches to the study and practice of innovation policy, instead drawing on the different theoretical elements that are particularly relevant to the case in question