Price Discrimination, Copyright Law, and Technological Innovation: Evidence From the Introduction of DVDs

Topics:
Music
Tags:
Copyright Law,
DVD,
Innovation
Source:
National Bureau of Economic Research

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Overview: This paper examines the welfare effects of intellectual property protection, accounting for firms' optimal responses to legal environments and technological innovation. It examines firms' use of indirect price discrimination in response to U.S. copyright law, which effectively prevents direct price discrimination. Using data covering VHS and DVD movie distribution, it explains studios' optimal pricing strategies under U.S. copyright law, and determines optimal pricing strategies under E.U. copyright law, which allows for direct price discrimination. It finds that studios' use of indirect price discrimination under US copyright law benefits consumers and harms retailers.

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Format: PDF | Size: 316KB | Date: Sep 2005 | Pages: 54

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