“Software Pricing and Copyright: Enorcement Against End-Users” by Ivan PNG
National University of Singapore
The incentive to copy software depends on publishers' price and monitoring strategy. We show that changes in price and monitoring have qualitatively different effects on welfare. Both a price reduction and an increase in monitoring will persuade some users to switch from copying to buying. Monitoring, however, reduces the expected benefit of those who continue to copy and deters some from usage (through copying) altogether. We show that a tax on monitoring will raise welfare.