Band 5, Heft 3

In this paper, I model competition between legal and pirate products. In this framework, the government affects competition through police spending and taxes on the legal products. Therefore, the government can choose the optimal combination of spending and taxes that fit better its goals. I show that governments focusing on eradicating piracy will use lower level of taxes and police spending than governments focused on maximizing consumption, consumer surplus, and welfare or government size. This result highlights the importance of demand side policies in the fight against piracy and challenges the traditional solo approach of supply side policies.

Static demand models for homogeneous network goods give rise to fulfilled-expectations equilibrium demand (FEED) curves, which, contrary to normal demand curves, may be upward sloping at certain intervals. We analyze some, as yet unexplored, properties of the FEED curves. We spell out the one-shot non-cooperative game, the Nash equilibria of which constitute the FEED curve. We show that, in a network environment, pricing below marginal cost may be required to reach critical mass, and competition could represent an obstacle to network development rather than being its driving force.

Wireless operators often outsource the task of creating content to independent content providers in the mobile Internet market. Revenue streams of the mobile Internet market typically consist of two main sources, data traffic and content sales. It is often the case that only the revenue from content sales is subject to sharing between wireless operators and content providers. This paper applies the "dummy variable axiom" to the market data of a representative Korean wireless operator to show that, in some cases, data traffic revenues should also be shared between the wireless operator and content providers.

This paper is an exploratory study on the interconnection economics of All-IP networks. To understand the economics of the yet-to-be-realized All-IP networks, this paper begins with discussing three important features of current IP networks: packet switching, receiver benefit, and two-sidedness. It then develops simple models of interconnection for basic fixed fee settlements and for session-based charges. The analysis shows that interconnection settlements depend on network size, market competitiveness, direct and cross network externalities, and costs. Some policy issues are also briefly discussed.