Abstract
ABSTRACTIn this paper, we analyse the pricing strategies and the level of digital rights management (DRM) protection in a two-echelon digital product supply chain that consists of one manufacturer and one retailer. Two different market structures are considered: Manufacturer Stackelberg (MS) and Vertical Integration. We show that the manufacturer could obtain more profit than the retailer in the MS model, and the joint profits of both sides in the VI model is no less than in the MS model. Further results are obtained by comparative analysis. We also examine how the quality of the digital products and the copyright enforcement impact the development of strategies. Our analytic results can help the firms choose appropriate DRM policy and optimal pricing for their products. It is also expected that the results can give an advice for the government developing the appropriate copyright enforcement.
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