Copyright and market structure under vertical relations

The purpose of this study is to investigate the copyright protection of intellectual property under vertical relations. Vertical relations among author, manufacturer and retailer are considered. We develop several models, each with a different structure of vertical integration. R&D levels, total quantities, profits and social welfare levels are compared. We also investigate the effect of copyright protection by modeling the cases of perfect protection, partial protection and no protection. We analyze whether copyright benefits social welfare. We explain the policy implications of our results for the protection of copyright.