Abstract
This paper considers the simplest DRM, which permits either free or no copying, with incomplete information about the type of consumer. We first obtain results concerning separability of consumers in a general situation, and show that there is a critical type of consumer. A higher utility type selects a menu of free copying whereas a lower one chooses not to copy. In a two-type model we indicate that optimal pricing for a producer is different from that under two-part tariffs. This price strategy brings about greater profits and social welfare if, and only if, self-production is more efficient than that of a producer.
| Original language | English |
|---|---|
| Pages (from-to) | 421-426 |
| Number of pages | 6 |
| Journal | Economics Letters |
| Volume | 93 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2006 Dec |
Keywords
- Copying
- Digital rights management
- Incomplete information
- Price discrimination
- Two-part tariff
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
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Cite this
Domon, K. (2006). Price discrimination of digital content. Economics Letters, 93(3), 421-426. https://doi.org/10.1016/j.econlet.2006.06.007