Pricing Information Goods in the Presence of Copying

U of London Queen Mary Economics Working Paper No. 463

36 Pages Posted: 20 Dec 2002  

Paul Belleflamme

GREQAM; CORE and Louvain School of Management, UCL (Université Catholique de Louvain); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: September 2002

Abstract

The effects of (private, small-scale) copying on the pricing behavior of producers of information goods are studied within a unified model a 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.

JEL Classification: L13, L82, L86, K11, O34

Suggested Citation

Belleflamme, Paul, Pricing Information Goods in the Presence of Copying (September 2002). U of London Queen Mary Economics Working Paper No. 463. Available at SSRN: https://ssrn.com/abstract=333323 or http://dx.doi.org/10.2139/ssrn.333323

Paul Belleflamme (Contact Author)

GREQAM ( email )

Centre de la Vieille Charité
2, rue de la Charité
Marseille, 13002
France

HOME PAGE: http://www.paulbelleflamme.com

CORE and Louvain School of Management, UCL (Université Catholique de Louvain) ( email )

34 Voie du Roman Pays
POBox L1.03.01
B-1348 Louvain-la-Neuve, B-1348
Belgium
+32 10 47 82 91 (Phone)
+32 10 47 43 01 (Fax)

HOME PAGE: http://perso.uclouvain.be/paul.belleflamme/Site/Home.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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