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

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

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Title: Price Discrimination, Copyright Law, and Technological Innovation: Evidence From The Introduction of DVDs
Author: Mortimer, Julie Holland
Citation: Mortimer, Julie Holland. 2007. Price discrimination, copyright law, and technological innovation: Evidence from the introduction of DVDs. Quarterly Journal of Economics 122(3): 1307-1350.
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Abstract: U. S. copyright law effectively prevents direct price discrimination for copyright holders that sell to different markets. In response, these firms can engage in indirect price discrimination. I derive theoretical predictions about the use of indirect price discrimination, and I analyze how optimal pricing strategies differ for different products. Using data on VHS and DVD movie distribution, I find that firms' pricing choices are consistent with the predictions of theory and that firms' use of indirect price discrimination benefits consumers (but harms ancillary retailers). Finally, I examine what optimal pricing strategies might look like in a legal environment that permits direct price discrimination.
Published Version: http://dx.doi.org/10.1162/qjec.122.3.1307
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:3425914
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