Model: Entry of a Digital Goods Producer
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.
KeywordsMarginal Cost Real Wage Market Entry Customer Base Closed Economy
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