Model: Entry of a Digital Goods Producer

Part of the Contributions to Economics book series (CE)


In this chapter, a theoretical framework of an access provider and producers of digital goods is presented. In Sect. 6.2, producers of pure digital goods compete for price-quality leadership. In Sect. 6.3, a platform provider of a digital, two-sided market is introduced. In both versions, a profit function for the digital producers in a closed economy is developed first. Then the economy is opened and the best choice of strategy for a digital goods producer located elsewhere in the world is deduced.


Marginal Cost Real Wage Market Entry Customer Base Closed Economy 
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Copyright information

© Physica-Verlag Heidelberg 2010

Authors and Affiliations

  1. 1.European Institute for International Economic Relations (EIIW)University of WuppertalWuppertalGermany

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