Fighting Information Good Piracy with Versioning

Information goods piracy is a pervasive problem as advanced information and communication technologies become so inexpensive and so easy to access. This problem, if not alleviated, can pose a serious loss to society as it can reduce information goods providers’ incentives to develop information goods or threaten the use and growth of the Internet as a distribution media for valued digital information goods. Contrasting with previous literature, which mainly consider instruments, such as law enforcement or technology-based solutions, that work on increasing individual piracy cost, we consider using versioning as a complementary means to these other methods. While the previous literature has shown that versioning may not be the optimal strategy for information goods (having negligible or concave marginal costs), we show that versioning could be a very effective and profitable instrument to fight piracy. Furthermore, we also show that it is possible to do this without sacrificing the consumer’s surplus and, as a result, the entire social welfare could increase. This suggests that by using versioning along with other instruments that work on increasing individual piracy cost, information goods providers can fight piracy more efficiently

Cost-benefit considerations in regulatory analysis

Justification for safety enhancements at nuclear facilities, e.g., a compulsory backfit to nuclear power plants, requires a value-impact analysis of the increase in overall public protection versus the cost of implementation. It has been customary to assess the benefits in terms of radiation dose to the public averted by the introduction of the safety enhancement. Comparison of such benefits with the costs of the enhancement then requires an estimate of the monetary value of averted dose (dollars/person rem). This report reviews available information on a variety of factors that affect this valuation and assesses the continuing validity of the figure of $1000/person-rem averted, which has been widely used as a guideline in performing value-impact analyses. Factors that bear on this valuation include the health risks of radiation doses, especially the higher risk estimates of the BEIR V committee, recent calculations of doses and offsite costs by consequence codes for hypothesized severe accidents at U.S. nuclear power plants under the NUREG-1150 program, and recent information on the economic consequences of the Chernobyl accident in the Soviet Union and estimates of risk avoidance based on the willingness-to-pay criterion. The report analyzes these factors and presents results on the dollars/person-rem ratio arising from different assumptions on the values of these factors

Economic effects of petroleum-supply shortfalls on the US economy: alternatives to the SCAM methodology

The DRI Quarterly Macro Model is used to forecast final demands and simulate the base case for the Supply Constrained Analysis Modeling (SCAM) system. As in other commercially available macroeconomic forecasting models, the only expectations formulation used in the DRI Macro Model is adaptive in nature and is estimated with historical data. This is inadequate in modeling short-term major changes in consumption behavior, for example, panic buying of gasoline, when there is a supply shortfall in petroleum. This report describes alternatives to using the DRI Macro Model to estimate the macroeconomic impacts in the SCAM system. The possibility of using models that incorporate the rational expectations formulation was investigated, as was the possibility of modifying the DRI model to better capture short-run consumption behavior. It is suggested that in the absence a good commercially available rational expectations macroeconomic model, the modification of the DRI Macro Model would have the lowest resource cost in terms of person- and computer-hours spent