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Using Voluntary Activity of Peer To Peer to Distribute Digital Content Facing Information Asymmetry

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1 Author(s)
Nakaizumi, T. ; Coll. of Econ., Kanto Gakuin Univ., Yokohama

We set up a game theoretic model with local and global network externality and information asymmetry, and explore the optimal price schedule to sell content using voluntary peer-to-peer activity. With information asymmetry and network externality, the content distributor, as a monopolist, should prepare a price menu for the content including low price with few copies available and high price with more copies available. This promotes the introducing activity of the peers with local network externality at first. As sales grow, the pricing should be changed dynamically. After global network effects become large enough, the need to use the peers' introduction disappears and only one menu with a high price and fewer copies should be adopted to raise the profit.

Published in:

Wireless Communications, Networking and Mobile Computing, 2007. WiCom 2007. International Conference on

Date of Conference:

21-25 Sept. 2007