Price Discrimination, Copyright Law, and Technological Innovation: Evidence From The Introduction of DVDs
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CitationMortimer, Julie Holland. 2007. Price discrimination, copyright law, and technological innovation: Evidence from the introduction of DVDs. Quarterly Journal of Economics 122(3): 1307-1350.
AbstractU. 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.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:3425914
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