IS

KHOUJA, MOUTAZ

Topic Weight Topic Terms
0.440 consumer consumers model optimal welfare price market pricing equilibrium surplus different higher results strategy quality
0.358 piracy goods digital property intellectual rights protection presence legal consumption music consumers enforcement publisher pirate
0.102 attention utilization existing codification model received does limitations theories receiving literature paying causes additional building

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Park, SungJune 1
digital experience goods 1 information goods piracy 1 music and movie piracy 1 online piracy 1
pricing 1 social welfare 1

Articles (1)

Optimal Pricing of Digital Experience Goods Under Piracy. (Journal of Management Information Systems, 2007)
Authors: Abstract:
    Piracy of digital experience goods such as music recordings has received increased attention in the literature. Much of this research has focused on pricing policies, protection against piracy, and governmental policies in the software industry. In this research, we focus on pricing policies of producers of digital experience goods. We consider a heterogeneous consumer market with different segments, each having a different affinity to piracy. We analyze the effect of different producer pricing policies on the revenue of the creator of the product, who may be different than the producer. Our results indicate that the explicit incorporation of these different consumer segments will cause the producer to charge lower prices and, therefore, lead to higher legal product diffusion. We show that the royalty system does not solve the double marginalization problem and is suboptimal from a supply-chain perspective. Also, the creator of the goods prefers a lower price than the producer's optimal price, and this tendency increases with the creator's per unit royalty.