No. 463: Pricing Information Goods in the Presence of Copying
Paul Belleflamme ,
Queen Mary, University of London
September 1, 2002
The effects of (private, small-scale) copying on the pricing behavior of producers of information goods are studied within a unified model à la Mussa-Rosen (1978). When the copying technology involves a marginal cost and no fixed cost, producers act independently. In this simple framework, we highlight the trade-off between ex ante and ex post efficiency considerations (how to provide the right incentives to create whilst limiting monopoly distortions?). When the copying technology involves a fixed cost and no marginal cost, pricing decisions are interdependent. We investigate the strategic pricing game by focussing on some significant symmetric Nash equilibria.
J.E.L classification codes: L13, L82, L86, K11, O34
Keywords:Information goods, Piracy, Copyright, Pricing