Buying, Sharing and Renting Information Goods

Information goods such as books, journals, computer software, music and videos can be copied, shared, resold, or rented. When such opportunities for sharing are present, the content producer will generally sell a smaller amount at a higher price which may increase or decrease profits. I identify thr...

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Bibliographic Details
Published inThe Journal of industrial economics Vol. 48; no. 4; pp. 473 - 488
Main Author Varian, Hal R.
Format Journal Article
LanguageEnglish
Published Oxford, UK and Boston, USA Blackwell Publishers Ltd 01.12.2000
Blackwell Publishers
Blackwell
Blackwell Publishing Ltd
Subjects
Book clubs
Economic theory
Industrial economics
Information goods
Information industry
Information sharing
Leases
Libraries
Marginal costs
Market prices
Profits
Publishing industry
Studies
Transaction costs
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Summary:Information goods such as books, journals, computer software, music and videos can be copied, shared, resold, or rented. When such opportunities for sharing are present, the content producer will generally sell a smaller amount at a higher price which may increase or decrease profits. I identify three circumstances where profits increase: (1) when the transactions cost of sharing is less than the marginal cost of production; (2) when content is viewed only a few times and transactions costs of sharing are low; and (3) when a sharing market provides a way to segment high-value and low-value users.
Bibliography:istex:2C6B4B2EF626B71D5AD31C8FBE5BB9C438B30B80
ark:/67375/WNG-GKB67W03-P
ArticleID:JOIE133
ISSN:0022-1821
1467-6451
DOI:10.1111/1467-6451.00133