Competition Between Firms that Bundle Information Goods

  title={Competition Between Firms that Bundle Information Goods},
  author={Scott A. Fay},
Information goods, such as journal articles, require substantial initial investment, but low incremental reproduction and distribution costs. Advances in computing and digital communications have nearly eliminated these incremental costs. Thus, positive per-item prices are ineÆcient because they discourages consumption with value greater than marginal cost. Further, very low per item prices will not recover rst-copy costs and thus rms will not have an incentive to create new content. Bundling… CONTINUE READING
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