Digital Rights Management and Technological Tying

Jin-Hyuk Kim ()

No 08-05, Working Papers from NET Institute

Abstract: This paper analyzes DRM-based technological tying, where the content and hardware form a system. A closed DRM system makes the legal content incompatible with a rival’s hardware, whose users must then obtain illegal copies. The main finding is that the tying firm gains market power in a competitive hardware market and invests in product upgrades at a later stage. Welfare implications of the policy that requires an open DRM system are also discussed.

Keywords: digital rights management; copying; tying (search for similar items in EconPapers)
JEL-codes: L12 L41 M21 O32 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2008-09, Revised 2008-09
New Economics Papers: this item is included in nep-com, nep-ipr and nep-pr~
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