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Digital Piracy: Subsidize Software Developers or Tax Them? The Interaction between Public and Private IPR Protection
Asatryan, Davit ; Žigić, Krešimir (advisor) ; Sun, Yiman (referee)
Digital piracy is a significant issue worldwide. In this thesis, I develop a model to study the effect of subsidizing or taxing the producer (developer) of a digital good on his decision whether to implement private protection of his product. I find that subsidies and the private protection of the producer are strategic complements: while subsidizing the producer incentivizes him to spend more resources on the private protection of his product against piracy, while taxing the producer takes away this incentive. I also explore the interaction between the two forms of public IPR protection: piracy fines and subsidies for the producer. I find that subsidies and piracy fines are strategic substitutes: increasing fines imply lower subsidies to the producer. Furthermore, I study whether subsidies or taxes are socially optimal. Within the modelling framework used, I find that both subsidies and taxes can be socially optimal depending on the existing piracy fines and the quality of the pirated product. While the conclusions may be particular to the modelling framework I develop, they may still provide valuable insights for policymakers when developing new anti-piracy measures. Further research is required to explore the interaction between subsidies and anti-piracy fines when both variables are endogenous.
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Labor Market Effects of the Working Family Tax Credit on Single Mothers in the UK
Sinani, Sofiana ; Menzel, Andreas (advisor) ; Žigić, Krešimir (referee)
The Labor Market Effects of the Working Family Tax Credit on Single Mothers in the UK. Sofiana Sinani August 2022 Bibliographic note SINANI, Sofiana. The Labor Market Effects of the Working Family Tax Credit on Single Mothers in the UK. Prague 2022. Master thesis. Center for Economic Research and Graduate Education - Economics Institute, A joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences. Thesis supervisor: Andreas Menzel, Ph.D. Abstract The Working Family Tax Credit (WFTC) was introduced in the UK in 1999. This policy provided fi- nancial incentives for work to low-income parents with children (primarily single mothers). The parents received full credit if they worked 16 hours/week and the credit decreases with more hours of work. The credit increased marginally when the parent worked 30 hours/week to stimulate full-time work. The WFTC unambiguously made work attractive; however, the effect on labor hours for parents employed in pre-WFTC is unclear. In this thesis, I investigate the effect of the WFTC on single mothers' paid labor hours. I apply the quantile difference-in-difference approach and estimate the quantile treatment effects. This approach allows me to find the effect of the WFTC given the single mothers' paid labor hours in pre-WFTC. My results...
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A note on Jain's digital piracy model: horizontal vs vertical product differentiation
Kúnin, Michael ; Žigić, Krešimir
We study how private intellectual property rights protection affects equilibrium prices and profits 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 (2008), 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 disclosed. Thus, both private and public (copyright) intellectual property rights protection are available on scene.
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The Efficiency of Regulation in the European Union
Serdarevič, Goran ; Mejstřík, Michal (advisor) ; Žigić, Krešimir (referee) ; Vacek, Pavel (referee)
This dissertation deals with the topic of economic regulation, focusing on applying empirical methods to assess the efficiency of regulatory measures used in different areas of the EU economy. It consists of three parts, the first part looks at the functioning of the EU merger control, the second and third focus on the relationship between regulation, competition and investment in telecommunications markets. The first chapter deals with the EU competition policy and the specific area of merger control, analysing empirically the impact of introducing more economic approach in evaluating competition effects of mergers at the EU level. Our key finding is that the regulatory reform introduced in 2004 has, to some extent, enhanced the efficiency of European merger control. This implies that the Commission's assessments of mergers under the new regulation post the 2004 reform are more consistent with the independent market evaluations. We find that the probability of an anti-competitive deal being cleared decreases significantly under the new regulatory framework. Nevertheless, the occurrence of unnecessary remedies imposed on pro-competitive mergers has not decreased as the result of the new merger control. Overall, our results indicate that more economic approach applied post 2004 reform increased the...
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Essays in Industrial Organization
Senyuta, Olena ; Žigić, Krešimir (advisor) ; Behringer, Stefan (referee) ; Harhoff, Dietmar (referee)
×ØÖ Ø Ì × ×× ÖØ Ø ÓÒ Ð× Û Ø ØÓÔ × Ö Ð Ø ØÓ Êš ÒÚ ×ØÑ ÒØ Ò Ò Ó ÒÓÙ× ×ÙÒ Ó×Ø× Ñ Ö Øמ ÁÒ Ô ÖØ ÙÐ Ö¸ Ò ÔØ Ö ½ 'Û × Ó¹ ÙØ ÓÖ Ý ÃÖ Ñ Ö ê µ¸ Û Ù Ð Ø ÓÖ Ø Ð ÑÓ Ð¸ Û Ö ÒÓÛÐ ×Ô ÐÐÓÚ Ö× Ö ÒØÖÓ Ù ÒØÓ ËÙØØÓÒ³× ÓÒ ÔØ Ó Ò Ó ÒÓÙ× ×ÙÒ Ó×Ø× ' ÒÚ ×ØÑ ÒØ Ò ÕÙ Ð Øݵž Ï × ÓÛ Ø Ø Û Ø ×Ô ÐÐÓÚ Ö× Ò Ö × Ò Ò Ø Ø Ú Ò ×× Ó ÒÚ ×ØÑ ÒØ Ò Ö × Ò ÕÙ Ð ØÝ Ö × Ò ¸ Ø ÐÓÛ Ö ÓÙÒ ÓÒ ÓÒ ÒØÖ Ø ÓÒ ÓÖ Ò Ò Ù×ØÖÝ Ö × × Ò ÙÐØ Ñ Ø ÐÝ ÓÐÐ Ô× × ØÓ Þ ÖÓ Û Ò ×Ô ÐÐÓÚ Ö× Ö Ð Ö ÒÓÙ Ò »ÓÖ Ø Ú Ò ×× Ó ÒÚ ×ØÑ ÒØ × ÐÓÛ ÒÓÙ ž Ï Ð×Ó × ÓÛ Ø Ø ÓÖ Ò ÒØ ÖÑ Ø Ö Ò Ó ×Ô ÐÐÓÚ Ö× ÖÑ× Ó ÒÚ ×Ø Ò Êš ÐØ ÓÙ Ø Ñ Ö Ø ×ØÖÙ ØÙÖ ÓÑ × Ö Ñ ÒØ × Ñ Ö Ø × Þ ÖÓÛ× 'Ø Ö × ÒÓ ÐÓÛ Ö ÓÙÒ ØÓ ÓÒ ÒØÖ Ø ÓÒµž ÁÒ Ø × ÓÒ Ô Öظ Û ÐÐÓÛ ÖÑ× ØÓ ÔÖÓØ Ø Ø Ö ÒÚ ×ØÑ ÒØ Ò×Ø ×Ô ÐÐÓÚ Ö× Ò Ó Ù× ÓÒ Ø ×ÝÑÑ ØÖ ÕÙ Ð Ö ¸ Û Ö ÐÐ ÖÑ× Ø Ö ÔÖÓØ Ø Ø Ö ÒÚ ×ØÑ ÒØ ÓÖ Ó ÒÓØ ÔÖÓØ Ø Ø Ø ÐО Ï × ÓÛ Ø Ø Ö ×Ô ÐÐÓÚ Ö× Ò »ÓÖ ÐÓÛ Ö Ø Ú Ò ×× Ó ÒÚ ×ØÑ ÒØ Ñ Ý Ò Ù ÖÑ× ØÓ ÔÖÓØ Ø Ø Ñ× ÐÚ × Ò×Ø ×Ô ÐÐÓÚ Ö׸ Ð Ò ØÓ Ö ÒÚ ×ØÑ ÒØ Ò ÕÙ Ð Øݸ Ò ØÓ ÑÓÖ ÓÒ ÒØÖ Ø Ñ Ö Ø ×ØÖÙ ØÙÖ ž Ì Ù׸ ËÙØØÓÒ³× Ö ×ÙÐØ ÓÒ Ø ÓÒ ÒØÖ Ø ÓÒ ÓÙÒ × ÔÖ × ÖÚ ž Ï Ö ÒØ Ø ØÛ Ò Ü ÔÓ×Ø Ò Ü ÒØ ÒÓÛÐ ×Ô ÐÐÓÚ Öמ Ï Ð Ø Ð ØØ Ö Ò ÐÙ ÓÒÐÝ ÜÓ ÒÓÙ× Ö Ø Ö ×Ø × Ó Ø Ñ Ö Ø ÒÚ ÖÓÒÑ Òظ Ø ÓÖÑ Ö Ð×Ó ÓÙÒØ ÓÖ ÔÓ×× Ð ÔÖÓØ Ø Ú Ø ÓÒ× ÙÒ ÖØ Ò Ý ÖÑמ ÁÒ ÔØ Ö ¾ Û ÖÖÝ ÓÙØ ÑÔ Ö Ð Ø ×Ø Ò Ó Ø ÖÓÐ Ó ÒÓÛÐ ×Ô ÐÐÓÚ Ö× Ò Ò Ò Ó ÒÓÙ× ×ÙÒ Ó×Ø× ÑÓ Ð ÒÚ ÖÓÒÑ ÒØž Ö×ظ Û × ÓÛ Ø Ø Ñ Ö Ø× Ò Û ÖÑ× ÙÒ ÖØ ÒØ Ò× Ú Êš ÜÔ Ò ØÙÖ × Ö...
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Private and public IPR protection in a vertically differentiated software duopoly
Žigić, Krešimir ; Střelický, J. ; Kúnin, Michael
We study the interaction between public and private intellectual property rights (IPR) protection in a duopoly in which software developers offer a product variety of differing quality and compete for heterogeneous users, who have an option to buy a legal version, possibly use an illegal copy, or not buy a product at all. Illegal usage implies violation of IPR and is punishable. A developer may use private IPR protection for his software if the level of piracy is high. An important intermediate step in our analysis addresses firms’ pricing strategies and the analysis of the impact of both private and public IPR protection on these strategies (with monopoly serving as a benchmark case). Last but not least, we make some comparisons with an analogous model based on horizontal product differentiation.
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Essays on Economics of Advertising
Valei, Azamat ; Žigić, Krešimir (advisor) ; Etro, Federico (referee) ; Kováč, Eugen (referee)
The dissertation studies two topics in economics of advertising in the framework of Industrial Organization. Particularly, it considers a role of advertising in the markets with network externalities in consumption and advertising as a strategic response of incumbent to new entry. The first chapter investigates the incentives for a monopolistic firm producing a good with network externalities to advertise when consumers face imperfect information and therefore must search to realize their actual willingness to pay for this good. A firm may disclose market information through advertising if it finds it beneficial. The results suggest that advertising is more likely in the case of a negative network effect and less likely with a positive network effect. When a monopolist faces a strong network externality, it chooses to support a maximum possible network and charge a price equal to the value of the externality. Finally, depending on the value of the search cost and the type of the network externality, a monopolist may use different advertising content: no information, price information only, product characteristics or both price and product characteristics. Specifically, if all consumers have the same search cost, as the search cost grows the firm must include more information in the advertising content....
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Essays on Vertically Differentiated Markets for Complementary Goods
Burlakov, Georgi ; Žigić, Krešimir (advisor) ; Giannakas, Konstantinos (referee) ; Kováč, Eugen (referee)
The purpose of this thesis is to shed light on how product complementarity affects the variety of possible equilibrium outcomes in a vertically differentiated market. Complementarity is not uncommon. Many vertically differentiated goods have value for the consumer as complements, that is only if they are used in combination with other goods which can also be of different qualities (e.g. piano with tuning service, business trip with hotel accommodation, computing platform with web browsing application, etc.). Complementarity between goods brings an exogenous expense that the consumer must pay on top of the price of any of the goods available in a vertically differentiated market. However, firms are only partially able to compensate consumers for the exogenous expense by charging lower prices. Some might also be prompted to increase the qualities of their goods. Then, however, the general validity of the maximum-differentiation choice cannot be taken for granted as in the classical no-complementarity case. How many firms will have positive market shares and whether they will serve all consumers at equilibrium cannot be decided based only on the distribution of the consumer identification characteristic~(income or taste). By taking this into account, this thesis reveals a set of possible equilibrium...
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Essays in Industrial Organization
Senyuta, Olena ; Žigić, Krešimir (advisor) ; Behringer, Stefan (referee) ; Harhoff, Dietmar (referee)
×ØÖ Ø Ì × ×× ÖØ Ø ÓÒ Ð× Û Ø ØÓÔ × Ö Ð Ø ØÓ Êš ÒÚ ×ØÑ ÒØ Ò Ò Ó ÒÓÙ× ×ÙÒ Ó×Ø× Ñ Ö Øמ ÁÒ Ô ÖØ ÙÐ Ö¸ Ò ÔØ Ö ½ 'Û × Ó¹ ÙØ ÓÖ Ý ÃÖ Ñ Ö ê µ¸ Û Ù Ð Ø ÓÖ Ø Ð ÑÓ Ð¸ Û Ö ÒÓÛÐ ×Ô ÐÐÓÚ Ö× Ö ÒØÖÓ Ù ÒØÓ ËÙØØÓÒ³× ÓÒ ÔØ Ó Ò Ó ÒÓÙ× ×ÙÒ Ó×Ø× ' ÒÚ ×ØÑ ÒØ Ò ÕÙ Ð Øݵž Ï × ÓÛ Ø Ø Û Ø ×Ô ÐÐÓÚ Ö× Ò Ö × Ò Ò Ø Ø Ú Ò ×× Ó ÒÚ ×ØÑ ÒØ Ò Ö × Ò ÕÙ Ð ØÝ Ö × Ò ¸ Ø ÐÓÛ Ö ÓÙÒ ÓÒ ÓÒ ÒØÖ Ø ÓÒ ÓÖ Ò Ò Ù×ØÖÝ Ö × × Ò ÙÐØ Ñ Ø ÐÝ ÓÐÐ Ô× × ØÓ Þ ÖÓ Û Ò ×Ô ÐÐÓÚ Ö× Ö Ð Ö ÒÓÙ Ò »ÓÖ Ø Ú Ò ×× Ó ÒÚ ×ØÑ ÒØ × ÐÓÛ ÒÓÙ ž Ï Ð×Ó × ÓÛ Ø Ø ÓÖ Ò ÒØ ÖÑ Ø Ö Ò Ó ×Ô ÐÐÓÚ Ö× ÖÑ× Ó ÒÚ ×Ø Ò Êš ÐØ ÓÙ Ø Ñ Ö Ø ×ØÖÙ ØÙÖ ÓÑ × Ö Ñ ÒØ × Ñ Ö Ø × Þ ÖÓÛ× 'Ø Ö × ÒÓ ÐÓÛ Ö ÓÙÒ ØÓ ÓÒ ÒØÖ Ø ÓÒµž ÁÒ Ø × ÓÒ Ô Öظ Û ÐÐÓÛ ÖÑ× ØÓ ÔÖÓØ Ø Ø Ö ÒÚ ×ØÑ ÒØ Ò×Ø ×Ô ÐÐÓÚ Ö× Ò Ó Ù× ÓÒ Ø ×ÝÑÑ ØÖ ÕÙ Ð Ö ¸ Û Ö ÐÐ ÖÑ× Ø Ö ÔÖÓØ Ø Ø Ö ÒÚ ×ØÑ ÒØ ÓÖ Ó ÒÓØ ÔÖÓØ Ø Ø Ø ÐО Ï × ÓÛ Ø Ø Ö ×Ô ÐÐÓÚ Ö× Ò »ÓÖ ÐÓÛ Ö Ø Ú Ò ×× Ó ÒÚ ×ØÑ ÒØ Ñ Ý Ò Ù ÖÑ× ØÓ ÔÖÓØ Ø Ø Ñ× ÐÚ × Ò×Ø ×Ô ÐÐÓÚ Ö׸ Ð Ò ØÓ Ö ÒÚ ×ØÑ ÒØ Ò ÕÙ Ð Øݸ Ò ØÓ ÑÓÖ ÓÒ ÒØÖ Ø Ñ Ö Ø ×ØÖÙ ØÙÖ ž Ì Ù׸ ËÙØØÓÒ³× Ö ×ÙÐØ ÓÒ Ø ÓÒ ÒØÖ Ø ÓÒ ÓÙÒ × ÔÖ × ÖÚ ž Ï Ö ÒØ Ø ØÛ Ò Ü ÔÓ×Ø Ò Ü ÒØ ÒÓÛÐ ×Ô ÐÐÓÚ Öמ Ï Ð Ø Ð ØØ Ö Ò ÐÙ ÓÒÐÝ ÜÓ ÒÓÙ× Ö Ø Ö ×Ø × Ó Ø Ñ Ö Ø ÒÚ ÖÓÒÑ Òظ Ø ÓÖÑ Ö Ð×Ó ÓÙÒØ ÓÖ ÔÓ×× Ð ÔÖÓØ Ø Ú Ø ÓÒ× ÙÒ ÖØ Ò Ý ÖÑמ ÁÒ ÔØ Ö ¾ Û ÖÖÝ ÓÙØ ÑÔ Ö Ð Ø ×Ø Ò Ó Ø ÖÓÐ Ó ÒÓÛÐ ×Ô ÐÐÓÚ Ö× Ò Ò Ò Ó ÒÓÙ× ×ÙÒ Ó×Ø× ÑÓ Ð ÒÚ ÖÓÒÑ ÒØž Ö×ظ Û × ÓÛ Ø Ø Ñ Ö Ø× Ò Û ÖÑ× ÙÒ ÖØ ÒØ Ò× Ú Êš ÜÔ Ò ØÙÖ × Ö...
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Essays on Pricing, Product Quality and Intellectual Property Rights Protection in Software Market
Střelický, Jiří ; Žigić, Krešimir (advisor) ; Horniaček, Milan (referee) ; Peitz, Martin (referee)
In this thesis, I explore the particular issues of pricing, product quality selection, and intellectual property rights (IPR) protection in the software market. In the first part of the thesis, I study price discrimination in a monopolistic software market. The monopolist charges different prices for the upgrade version and for the full version. Consumers are heterogeneous in taste for software that is infinitely durable and there is no resale. I show that price discrimination leads to a higher software quality but raises both absolute price and price per quality. This price discrimination decreases the total number of consumers compared to no discrimination. Finally, such discrimination decreases consumers' surplus but increases the developer's profit and social welfare that attains the social optimum in the limit. In the second part of the thesis, I focus on the interaction between a regulator's IPR protection policy against software piracy on the one side and the forms of IPR protection that software producers may themselves undertake to protect their IPR on the other side. Two developers, each offering a variety of different quality, compete for heterogeneous users who choose among purchasing a legal version, using an illegal copy, and not using a product at all. Using an illegal version...
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