{"title":"Fighting free with free: Freemium vs. Piracy","authors":"","doi":"10.1016/j.irle.2024.106226","DOIUrl":null,"url":null,"abstract":"<div><p>We analyze the optimal business model of a firm facing piracy. The firm either sells a premium version of its product, or also offers a free version along with the premium version. The firm can in turn impose restrictions on the use of the free version. Consumers can choose between the free and the premium version, but can also get an illegal digital copy. We show that freemium offers can reduce digital piracy by fighting free with free and that firms choose their optimal business model depending on the strength of copyright protection. Therefore, the strength of copyright protection can lead firms to choose a traditional business model rather than the new freemium model, impacting significantly the legal usage of the good.</p></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":null,"pages":null},"PeriodicalIF":0.9000,"publicationDate":"2024-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Law and Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0144818824000462","RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We analyze the optimal business model of a firm facing piracy. The firm either sells a premium version of its product, or also offers a free version along with the premium version. The firm can in turn impose restrictions on the use of the free version. Consumers can choose between the free and the premium version, but can also get an illegal digital copy. We show that freemium offers can reduce digital piracy by fighting free with free and that firms choose their optimal business model depending on the strength of copyright protection. Therefore, the strength of copyright protection can lead firms to choose a traditional business model rather than the new freemium model, impacting significantly the legal usage of the good.
期刊介绍：
The International Review of Law and Economics provides a forum for interdisciplinary research at the interface of law and economics. IRLE is international in scope and audience and particularly welcomes both theoretical and empirical papers on comparative law and economics, globalization and legal harmonization, and the endogenous emergence of legal institutions, in addition to more traditional legal topics.
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