In an attempt to protect their intellectual property and compete effectively in an increasingly dynamic marketplace, software producers have employed a number of preventive and deterrent measures to counter software piracy. Conventional wisdom suggests that reducing piracy will force consumers to legitimately acquire software, thus increasing firm profits. In this paper, we develop an analytical model, using Buchanan's economic theory of clubs, to test the implications of anti-piracy measures on producer profits. Our results suggest that deterrent measures can potentially increase profits. Empirical results are also presented which support the assumptions of the analytical model.
Gopal, Ram D. and Sanders, G. Lawrence, "THE EFFECT OF PREVENTIVE AND DETERRENT SOFTWARE PIRACY STRATEGIES ON PRODUCER PROFITS" (1992). ICIS 1992 Proceedings. 9.