Price Discrimination and Copyright Law: Evidence from the Introduction of Dvds

52 Pages Posted: 16 Dec 2004

See all articles by Julie H. Mortimer

Julie H. Mortimer

Boston College; National Bureau of Economic Research (NBER)

Date Written: December 2004

Abstract

This paper examines the welfare effects of intellectual property protection, accounting for firms' optimal responses to legal environments. I examine firms' use of indirect price discrimination in response to U.S. copyright law preventing direct price discrimination. Using data covering VHS and DVD movie distribution, I explain studios' optimal pricing strategies under U.S. copyright law, and determine optimal pricing strategies under E.U. copyright law, which allows for direct price discrimination. I find that studios' use of indirect price discrimination benefits consumers and harms retailers.

Optimal pricing under E.U. copyright law further benefits studios and consumers. I also reanalyze these issues assuming continued DVD adoption.

Suggested Citation

Mortimer, Julie H., Price Discrimination and Copyright Law: Evidence from the Introduction of Dvds (December 2004). Available at SSRN: https://ssrn.com/abstract=636064 or http://dx.doi.org/10.2139/ssrn.636064

Julie H. Mortimer (Contact Author)

Boston College ( email )

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HOME PAGE: http://fmwww.bc.edu/ec/mortimer.php

National Bureau of Economic Research (NBER) ( email )

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