Alleviating Software Piracy: The Role of Online Renting

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Author(s): Xiaohua H. Zeng (National University of Singapore, Singapore), T. S. Y. Lee (National University of Singapore, Singapore)and H. H. Teo (National University of Singapore, Singapore)
Copyright: 2002
Pages: 6
Source title: Issues & Trends of Information Technology Management in Contemporary Organizations
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-930708-39-6.ch224
ISBN13: 9781930708396
EISBN13: 9781466641358

Keywords: Engineering Science Reference / IT Research & Theory / IT Research and Theory / Library & Information Science

Abstract

Online rental of software is emerging as a new way of dissemination for several major software firms. Compared to outright selling, the renting scheme delivers the software as a service instead of a physical good. Hence, users cannot privately make copies for resale in the market. We investigate the impact of the renting mechanism on software piracy and pricing in a two-period model whereby a piracy market is present in the second period. We develop and compare models with or without renting. Our analyses show that renting reduces social welfare but helps to increase a vendor’s profit under certain conditions.

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