Optimal Third Degree Price Discrimination of Digital Content by the Digital Rights Management facing Network Externality
拓也 中泉 · Institutional Repositories DataBase (IRDB) · 2006
We investigate the optimal price discrimination procedure to distribute digital content when there is a network externality or bandwagon effect.In this paper we assume that we can apply any third degree price discrimination procedure using Digital Rights Management.Thus we apply to a different price to a different timing.Without network externality monopolistic supplier can set the price schedule such that she sets a price highly at first and make that lower and lower as the demand is diminishing.Facing a network externality, on the other hand, it is proved to be profitable to set the lower price at the earlier period and to get the more demand in order to raise the content value and the subsequent demand.We show it by the simple liner demand and linear network effect function.