Pricing Information Goods in the Presence of Copying
U of London Queen Mary Economics Working Paper No. 463
36 Pages Posted: 20 Dec 2002
Date Written: September 2002
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: Suggested Citation