Flexibility as an Instrument in Digital Rights Management

Dirk Bergemann, Thomas Eisenbach, Joan Feigenbaum () and Scott Shenker
Additional contact information
Joan Feigenbaum: Dept. of Computer Science, Yale University
Scott Shenker: ICSI and Dept. of Electrical Engineering and Computer Science, University of California, Berkeley

No 1505, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We consider the optimal design of flexible use in a digital-rights-management policy. The basic model considers a single distributor of digital goods and a continuum of consumers. Each consumer can acquire the digital good either as a licensed product or an unlicensed copy. The availability of (or access to) unlicensed copies is increasing both in the number of licensed copies and in the flexibility accorded to licensed copies. We thus analyze the optimal design of flexibility in the presence of unlicensed distribution channels (the "greynet"). We augment the basic model by introducing a “secure platform” that is required to use the digital good. We compare the optimal design of flexibility in the presence of a platform to the one without a platform. Finally, we analyze the equilibrium provision when platform and content are complimentary goods but are distributed and priced by different sellers.

Keywords: Digital Rights Management; Platform; Flexibility; Piracy (search for similar items in EconPapers)
JEL-codes: C79 D42 L15 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2005-04
New Economics Papers: this item is included in nep-cul
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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