TY  - JOUR
AU  - Mortimer,Julie Holland
TI  - Price Discrimination, Copyright Law, and Technological Innovation: Evidence from the Introduction of DVDs
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11676
PY  - 2005
Y2  - October 2005
UR  - http://www.nber.org/papers/w11676
L1  - http://www.nber.org/papers/w11676.pdf
N1  - Author contact info:
Julie H. Mortimer
Department of Economics
Boston College
140 Commonwealth Avenue
Chestnut Hill, MA 02467
Tel: 617-552-3676
Fax: 617-552-2308
E-Mail: julie.mortimer.2@bc.edu
M2  - featured in NBER digest on 2005-10-03
AB  - This paper examines the welfare effects of intellectual property protection, accounting for firms' optimal responses to legal environments and technological innovation. I examine firms' use of indirect price discrimination in response to U.S. copyright law, which effectively prevents direct price discrimination. Using data covering VHS and DVD movie distribution, I explain studios' optimal pricing strategies under U.S. copyright law, and determine optimal pricing strategies under E.U. copyright law, which allows for direct price discrimination. I analyze these optimal pricing strategies for both the existing VHS technology and the new digital DVD technology. I find that studios' use of indirect price discrimination under US copyright law benefits consumers and harms retailers. Optimal pricing under E.U. copyright law also tends to benefit studios and consumers. I also reanalyze these issues assuming continued DVD adoption.
ER  -