Abstract The purpose of this paper is to investigate how digitalization affects vertically related content industries with the threat of piracy. We construct a model of vertical relationship where an upstream [a downstream] firm is considered as a content provider [a retailer]. Three business models are proposed depending on who has the right to implement digital rights management (DRM): a vertically-integrated entity, an upstream, and a downstream. First, we analyze how different modes of control on DRM affect the optimal prices and the level of copy protection. The results are dependent upon the different control modes of DRM and the degree of opportunistic behavior responding to increasing piracy costs. Second, we analyze the effect of two types of piracy depending on distribution channels (non-digital versus digital). Strengthening intellectual property rights (IPR) protection results in a price hike for both cases, while we have opposite changes in quantities depending on the types of piracy.
{"title":"The Effect of Piracy and Digital Rights Management on Vertically Related Content Industries","authors":"S. Bae, Myungsup Kim, Kyeongwon Yoo","doi":"10.1515/rne-2017-0035","DOIUrl":"https://doi.org/10.1515/rne-2017-0035","url":null,"abstract":"Abstract The purpose of this paper is to investigate how digitalization affects vertically related content industries with the threat of piracy. We construct a model of vertical relationship where an upstream [a downstream] firm is considered as a content provider [a retailer]. Three business models are proposed depending on who has the right to implement digital rights management (DRM): a vertically-integrated entity, an upstream, and a downstream. First, we analyze how different modes of control on DRM affect the optimal prices and the level of copy protection. The results are dependent upon the different control modes of DRM and the degree of opportunistic behavior responding to increasing piracy costs. Second, we analyze the effect of two types of piracy depending on distribution channels (non-digital versus digital). Strengthening intellectual property rights (IPR) protection results in a price hike for both cases, while we have opposite changes in quantities depending on the types of piracy.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"97 1","pages":"1 - 26"},"PeriodicalIF":0.7,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80523714","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The contribution explains the financing system of the German railway sector. Market players like infrastructure managers, railway undertakings, the federal and the regional level (“Länder”) and the Bundesnetzagentur are interrelated due to the institutional setting, especially due to the control- and supervision duties of Bundesnetzagentur. This also concerns the financial flows related interconnections of market players and the government level. Bundesnetzagentur is under the new rail regulation law in charge of controlling the charging system of infrastructure managers. The new legal framework allows for the first time an incentive regulation related to infrastructure charges and sets incentives for the infrastructure manager to decrease costs and increase the traffic on the network.
{"title":"Track Access Charge Control in the Railway Sector, Its Interaction with Specific Financing Structures and the Determination of Incentives – The German Infrastructure Manager DB Netz AG","authors":"Christiane Trampisch","doi":"10.1515/rne-2018-0015","DOIUrl":"https://doi.org/10.1515/rne-2018-0015","url":null,"abstract":"Abstract The contribution explains the financing system of the German railway sector. Market players like infrastructure managers, railway undertakings, the federal and the regional level (“Länder”) and the Bundesnetzagentur are interrelated due to the institutional setting, especially due to the control- and supervision duties of Bundesnetzagentur. This also concerns the financial flows related interconnections of market players and the government level. Bundesnetzagentur is under the new rail regulation law in charge of controlling the charging system of infrastructure managers. The new legal framework allows for the first time an incentive regulation related to infrastructure charges and sets incentives for the infrastructure manager to decrease costs and increase the traffic on the network.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"146 1","pages":"177 - 186"},"PeriodicalIF":0.7,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77746954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Several regulatory authorities have recently allowed competing network operators to co-invest in network infrastructure. With the use of a laboratory experiment, we investigate the impact of co-investments on competition in regulated network industries, particularly in comparison to unilateral and duplicate investments. Our main finding is that co-investment (i.e. cooperation at the infrastructure level) facilitates tacit collusion (i.e. cooperation at the retail level) significantly, which questions the positive evaluation of co-investments with respect to consumers’ surplus in the theoretical literature.
{"title":"Co-Investments and Tacit Collusion in Regulated Network Industries: Experimental Evidence","authors":"J. Krämer, I. Vogelsang","doi":"10.1515/rne-2016-0026","DOIUrl":"https://doi.org/10.1515/rne-2016-0026","url":null,"abstract":"Abstract Several regulatory authorities have recently allowed competing network operators to co-invest in network infrastructure. With the use of a laboratory experiment, we investigate the impact of co-investments on competition in regulated network industries, particularly in comparison to unilateral and duplicate investments. Our main finding is that co-investment (i.e. cooperation at the infrastructure level) facilitates tacit collusion (i.e. cooperation at the retail level) significantly, which questions the positive evaluation of co-investments with respect to consumers’ surplus in the theoretical literature.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"98 1","pages":"35 - 61"},"PeriodicalIF":0.7,"publicationDate":"2016-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/rne-2016-0026","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72469570","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract In recent years, regulators in various parts of the world have capped interchange fees on debit and credit cards. The justification for the caps rests to a large extent on the argument that these cards have, for certain merchants, become must-take cards rather than “wanna-take cards.” That is, there are merchants who accept payment cards not because they bring net convenience benefits but out of fear of losing profitable business to card-accepting competitors. This paper presents an original approach that allows to quantify, for the first time, the relative importance of the two motivations. We find, for the case of France in 2008, that the must-take phenomenon effectively exists, but that it applies to only 5.8–19.8 percent of the card-accepting merchants and to a mere 3.9–13.5 percent of all retailers.
{"title":"Merchant Acceptance of Payment Cards: “Must Take” or “Wanna Take”?","authors":"D. Bounie, A. François, L. Van Hove","doi":"10.1515/rne-2017-0011","DOIUrl":"https://doi.org/10.1515/rne-2017-0011","url":null,"abstract":"Abstract In recent years, regulators in various parts of the world have capped interchange fees on debit and credit cards. The justification for the caps rests to a large extent on the argument that these cards have, for certain merchants, become must-take cards rather than “wanna-take cards.” That is, there are merchants who accept payment cards not because they bring net convenience benefits but out of fear of losing profitable business to card-accepting competitors. This paper presents an original approach that allows to quantify, for the first time, the relative importance of the two motivations. We find, for the case of France in 2008, that the must-take phenomenon effectively exists, but that it applies to only 5.8–19.8 percent of the card-accepting merchants and to a mere 3.9–13.5 percent of all retailers.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"46 1","pages":"117 - 146"},"PeriodicalIF":0.7,"publicationDate":"2016-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81008565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Yann Balgobin, D. Bounie, Martin Quinn, P. Waelbroeck
Abstract The protection of financial personal data has become a major concern for Internet users in the digital economy. This paper investigates whether the consumers’ use of non-bank payment instruments that preserve financial privacy from banks and relatives may increase their online purchases. We analyze the purchasing decisions and the use of bank and non-bank payment instruments of a representative sample of French Internet consumers in 2015. Using two econometric methods, namely a two-step regression and a Bayesian Markov Chain Monte Carlo model to account for a potential endogeneity problem, we find evidence that the use of a non-bank payment instrument positively influences consumers’ online purchases.
{"title":"Payment Instruments, Financial Privacy and Online Purchases","authors":"Yann Balgobin, D. Bounie, Martin Quinn, P. Waelbroeck","doi":"10.2139/ssrn.2807036","DOIUrl":"https://doi.org/10.2139/ssrn.2807036","url":null,"abstract":"Abstract The protection of financial personal data has become a major concern for Internet users in the digital economy. This paper investigates whether the consumers’ use of non-bank payment instruments that preserve financial privacy from banks and relatives may increase their online purchases. We analyze the purchasing decisions and the use of bank and non-bank payment instruments of a representative sample of French Internet consumers in 2015. Using two econometric methods, namely a two-step regression and a Bayesian Markov Chain Monte Carlo model to account for a potential endogeneity problem, we find evidence that the use of a non-bank payment instrument positively influences consumers’ online purchases.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"1 1","pages":"147 - 168"},"PeriodicalIF":0.7,"publicationDate":"2016-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79834151","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The paper provides an analysis of the second-degree price discrimination problem on a monopolistic two-sided market. In a framework with two distinct types of agents on either side of the market, we show that under incomplete information the extent of platform access for high-demand agents is strictly lower than the benchmark level with complete information. In addition, we find that it is possible in the monopoly optimum that the contract for low-demand agents is more expensive than the one for high-demand agents if the extent of interaction with agents from the opposite market side is contract-specific.
{"title":"Second-Degree Price Discrimination on Two-Sided Markets","authors":"Enrico Böhme","doi":"10.1515/rne-2015-0051","DOIUrl":"https://doi.org/10.1515/rne-2015-0051","url":null,"abstract":"Abstract The paper provides an analysis of the second-degree price discrimination problem on a monopolistic two-sided market. In a framework with two distinct types of agents on either side of the market, we show that under incomplete information the extent of platform access for high-demand agents is strictly lower than the benchmark level with complete information. In addition, we find that it is possible in the monopoly optimum that the contract for low-demand agents is more expensive than the one for high-demand agents if the extent of interaction with agents from the opposite market side is contract-specific.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"12 1","pages":"115 - 91"},"PeriodicalIF":0.7,"publicationDate":"2016-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79399957","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The UK Government has proposed national roaming to ensure that consumers may use rival networks in areas where their own operator does not offer (network) coverage (these are known as partial not-spots). The proposed policy aimed at increasing the likelihood of callers being able to make and receive calls. While this may raise a number of concerns in terms of possible harm to consumers, this article only focuses on one question: whether national roaming, rather than making it more likely that consumers in partial not-spots may be able make and receive calls, may achieve the very opposite outcome. This is because, under national roaming, and depending on the level of the charge, operators may have the incentive to withdraw their network coverage and roam instead. We also analyse the implications for dual coverage areas.
{"title":"Would David be More Likely to Speak to Angela under National Roaming?","authors":"A. Basso, Pietro Crocioni","doi":"10.1515/rne-2016-0016","DOIUrl":"https://doi.org/10.1515/rne-2016-0016","url":null,"abstract":"Abstract The UK Government has proposed national roaming to ensure that consumers may use rival networks in areas where their own operator does not offer (network) coverage (these are known as partial not-spots). The proposed policy aimed at increasing the likelihood of callers being able to make and receive calls. While this may raise a number of concerns in terms of possible harm to consumers, this article only focuses on one question: whether national roaming, rather than making it more likely that consumers in partial not-spots may be able make and receive calls, may achieve the very opposite outcome. This is because, under national roaming, and depending on the level of the charge, operators may have the incentive to withdraw their network coverage and roam instead. We also analyse the implications for dual coverage areas.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"101 1","pages":"63 - 90"},"PeriodicalIF":0.7,"publicationDate":"2016-04-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85027427","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We study the impact of net neutrality on the content market with endogenous product differentiation. We show that when the Internet service provider is allowed to offer different connection qualities to content providers, it has incentives to favor contents that have a broader market feature. This biases content providers towards choosing those broader products, which may result in too little product differentiation in the content market. By eliminating the possibility of discrimination, net neutrality can reduce such distortion in the content market, and induce more efficient product choices. Net neutrality also raises social welfare if the extent of discrimination is relatively small compared to the extent of product differentiation.
{"title":"Fear of Discrimination: Net Neutrality and Product Differentiation on the Internet","authors":"Xingyi Liu","doi":"10.1515/rne-2017-0010","DOIUrl":"https://doi.org/10.1515/rne-2017-0010","url":null,"abstract":"Abstract We study the impact of net neutrality on the content market with endogenous product differentiation. We show that when the Internet service provider is allowed to offer different connection qualities to content providers, it has incentives to favor contents that have a broader market feature. This biases content providers towards choosing those broader products, which may result in too little product differentiation in the content market. By eliminating the possibility of discrimination, net neutrality can reduce such distortion in the content market, and induce more efficient product choices. Net neutrality also raises social welfare if the extent of discrimination is relatively small compared to the extent of product differentiation.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"19 1","pages":"211 - 247"},"PeriodicalIF":0.7,"publicationDate":"2016-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79069340","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Should rights be publicly or privately enforced in the case of digital piracy? The emergence of large-scale anti-piracy laws and the existence of illegal non-monitored channels raise important issues for the design of anti-piracy policies. We study the impact of these demand-side policies in two enforcement settings (namely, public and private enforcement settings) with an outside adoption option for users of an illegal non-monitored channel. Our results show that public enforcement generates higher monitoring and lower price levels, and also higher legal welfare than private enforcement. However, we identify potential conflicts of interest between the legal seller and the social planner when the efficiency of the illegal non-monitored channel is low. Introducing supply-side policies, i.e. policies targeted to suppliers of illegal content, we find that they may have unexpected impacts and can damage legal welfare. We also identify situations in which the two policies are substitutes or complements.
{"title":"Private or Public Law Enforcement? The Case of Digital Anti-Piracy Policies with Illegal Non-Monitored Behaviors","authors":"Eric Darmon, Thomas Le Texier","doi":"10.1515/rne-2016-0027","DOIUrl":"https://doi.org/10.1515/rne-2016-0027","url":null,"abstract":"Abstract Should rights be publicly or privately enforced in the case of digital piracy? The emergence of large-scale anti-piracy laws and the existence of illegal non-monitored channels raise important issues for the design of anti-piracy policies. We study the impact of these demand-side policies in two enforcement settings (namely, public and private enforcement settings) with an outside adoption option for users of an illegal non-monitored channel. Our results show that public enforcement generates higher monitoring and lower price levels, and also higher legal welfare than private enforcement. However, we identify potential conflicts of interest between the legal seller and the social planner when the efficiency of the illegal non-monitored channel is low. Introducing supply-side policies, i.e. policies targeted to suppliers of illegal content, we find that they may have unexpected impacts and can damage legal welfare. We also identify situations in which the two policies are substitutes or complements.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"38 1","pages":"169 - 210"},"PeriodicalIF":0.7,"publicationDate":"2016-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75791806","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Irene Bertschek, Wolfgang Briglauer, Kai Hüschelrath, B. Kauf, T. Niebel
Abstract We provide a structured overview of the quantitative research on the economic impacts of broadband internet. Differentiating between wireline and wireless technologies as well as broadband availability and broadband adoption, respectively, we review studies investigating the impacts on economic growth, employment and regional development as well as productivity and firm performance. Eventually, the survey does not only allow the identification of main research gaps but also provides useful information for policy makers on the significance and importance of communication networks for social welfare.
{"title":"The Economic Impacts of Broadband Internet: A Survey","authors":"Irene Bertschek, Wolfgang Briglauer, Kai Hüschelrath, B. Kauf, T. Niebel","doi":"10.1515/rne-2016-0032","DOIUrl":"https://doi.org/10.1515/rne-2016-0032","url":null,"abstract":"Abstract We provide a structured overview of the quantitative research on the economic impacts of broadband internet. Differentiating between wireline and wireless technologies as well as broadband availability and broadband adoption, respectively, we review studies investigating the impacts on economic growth, employment and regional development as well as productivity and firm performance. Eventually, the survey does not only allow the identification of main research gaps but also provides useful information for policy makers on the significance and importance of communication networks for social welfare.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"44 1","pages":"201 - 227"},"PeriodicalIF":0.7,"publicationDate":"2015-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77617042","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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