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Eliminating digital rights management from the E-book market

Author

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  • Kim, Jin-Hyuk
  • Leung, Tin Cheuk

Abstract

We examine the impact of removing Digital Rights Management (DRM) from electronic book devices. We derive a Bayesian hierarchical logit model based on the consumer’s utility maximization problem and estimate the model using data from a choice-based survey. We then simulate the counterfactual market outcomes when DRM is removed; on average, the consumer surplus increases nontrivially holding everything else constant. However, the gain in consumer surplus is diminished when we re-calibrate e-book device prices. Further, if there is a negative shock to content supply, then the consumer surplus could in fact decrease after DRM removal.

Suggested Citation

  • Kim, Jin-Hyuk & Leung, Tin Cheuk, 2021. "Eliminating digital rights management from the E-book market," Information Economics and Policy, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:iepoli:v:57:y:2021:i:c:s0167624521000238
    DOI: 10.1016/j.infoecopol.2021.100935
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    More about this item

    Keywords

    Ebook; Demand system; Platform; DRM;
    All these keywords.

    JEL classification:

    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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