German Working Papers in Law and Economics: Vol. 2003: Article 10.
This paper looks at how copyright piracy affects the quality of products.
How well copyright is enforced can affect firms’ willingness to offer high or lower quality products.
- In the digital environment, copies can be made of copies without loss of quality. So copyright owners lose the ability to recoup losses from copying by charging more for an original knowing that copies will be made of it.
- Piracy gives firms reasons to offer a lower quality version of its product, in the hope that some consumers will buy this instead of using a pirated copy.
- More restrictive or more actively enforced copyright law will tend to raise prices and quality.