The Market for Intellectual Property: The Case of Complementary Oligopoly
The Economics of Copyright: Developments in Research and Analysis
This paper applies a model of complementary oligopoly and anticommons pricing to the market for intellectual property rights. Our model demonstrates a surprising and interesting overlooked result: In the market for complementary goods, price coordination and monopolistic pricing do not necessarily represent inefficient equilibria, when compared to the alternative Nash equilibrium. Due to the peculiar cross-price effects in the supply of complementary goods, price coordination and monopolistic supply often constitute an improvement over the alternative equilibrium outcomes. To be precise, the welfare effects of competition and price coordination depend on the nature of the intellectual product concerned. This has significant and obvious implications for the economic analysis of copyright collectivization, as well as for antitrust regulation in this area.
Francesco Parisi, The Market for Intellectual Property: The Case of Complementary Oligopoly, in The Economics of Copyright: Developments in Research and Analysis 158-171 (Wendy Gordon & Richard Watt, eds., Edward Elgar, 2003)