Digital Rights Management and the Pricing of Digital Products

Digital products such as movies, music and computer software are protected both by self-help measures such as encryption and copy controls, and by the legal right to prevent copying. We explore how digital rights management and other technical protections affect the pricing of content, and consequently, why content users, content vendors, and antitrust authorities might have different views on what technical capabilities should be deployed. We discuss the potential for collusion through technology

How Do Mobile Information Technology Networks Affect Firm Strategy and Performance? Firm-Level Evidence from Taxicab Fleets

This paper examines how the adoption of mobile information technology networks impact firm strategy and performance in the U.S. taxicab industry. Using a rich, novel firm-level data set from the Economic Census, I test transaction cost economics' prediction that adoption of mobile IT networks leads to shifts in the boundary of the firm toward increased fleet ownership of vehicles. I then exploit the homogeneity of the industry's production function and exogenous variation in local market conditions to precisely measure the impact of adoption of mobile IT networks on productivity. I find strong evidence that firms respond to adoption of mobile IT networks by changing their organizational structure, shifting toward owning a greater fraction of vehicles in their fleets (as opposed to contracting with independent driver-owners for vehicles). I then use a precise and economically meaningful measure of firm performance to show that adoption of mobile IT networks causes firms to become more productive. The results suggest that adoption of mobile IT networks increases asset utilization by improving within-firm coordination but that firms must simultaneously shift toward a more highly vertically integrated structure to fully capture the benefits of mobile IT networks

Pricing and Multi-Market Contact in the Cable TV Industry

This paper links empirical literature on the use of price as an entry deterring mechanism with literature on the effect of multi-market contact on competition. The analysis uses a dataset of cable TV system prices to provide evidence that incumbent cable TV firms use price to deter entry by telecom overbuilders as well as cities with municipal utilities. There is also some evidence that multi-market contact with telecom overbuilders results in lower prices. However, there is no evidence that incumbents use price to deter cable overbuilders. In addition to linking entry deterrence with multi-market contact, this study has two other unique features. First, it establishes entry deterrence using two techniques, one of which relies on theory by Ellison and Ellison (2008) on non-monotonic price decreases in response to entry probability. Second, it uses detailed price and channel data at the service tier level

What Makes a Successful Transit Investment?

The University of California University Transportation Center (UCTC) at the University of California, Berkeley, recently completed a study focused on the factors that characterize the most successful transit investments\u2014specifically new rail transit systems

The Public health impact of needle exchange programs in the United States and abroad: summary, conclusions, and recommendations

School of Public Health, University of California, Berkeley, Institute for Health Policy Studies, University of California, San Francisco.Cover title."Prepared for the Centers for Disease Control and Prevention.""Funded through a cooperative agreement with the Association of Schools of Public Health (ASPH Agreement No. M1589)."Includes bibliographical references (p. 33-43)

CUTC Student of the Year Recognized for Research in Freeway Traffic

The CUTC research was part of the Connected Corridors project, a collaborative effort to research, develop, and test a framework for corridor transportation system management in California. Reilly\u2019s contribution pertained to the management of freeway traffic via two distinct control measures: on-ramp metering and variable speed limits. Reilly developed algorithms so that both measures could be deployed in joint, coordinated fashion on freeways of extended physical lengths. The algorithms enable a proactive approach to freeway management by anticipating the metering rates and posted speed limits suitable for later times during a busy rush. This anticipatory feature was made possible by attendant models that project in time the freeway\u2019s traffic demands and their potential impacts on congestion levels. In simulations of a hypothetical but realistic freeway with noisy sensor data, the proactive metering algorithm was shown to reduce delay by up to 3 percent. A strictly reactive metering scheme was found to reduce delay by less than 2 percent

Collaborative Gatekeepers

In their efforts to hold financial institutions accountable after the 2007 financial crisis, U.S. regulators have repeatedly turned to anti-money-laundering laws. Initially designed to fight drug cartels and terrorists, these laws have recently yielded billion-dollar fines for all types of bank engagement in fraud and have spurred an overhaul of financial institutions’ internal compliance. This increased reliance on anti-money-laundering laws, we argue, is due to distinct features that can better help regulators gain insights into financial fraud. Most other financial laws enlist private firms as gatekeepers and hold them liable if they knowingly or negligently engage in client fraud. Yet, as long as gatekeepers maintain deniability, they can accommodate dubious client requests. Instead, anti-money-laundering laws require gatekeepers to report to regulators suspicions of misconduct, even without clear proof of fraud. Because suspicions arise early in the gatekeeper–client relationship, conflicts of interest are not likely to be as strong. Moreover, the task of identifying suspicious cases can be more readily outsourced to compliance departments, lessening dependence on front-line employees whose future might be tied to specific clients. Finally, suspicions may arise even in gatekeepers who only have partial access to clients’ transactions and, thus, cannot come to full knowledge of the fraud. Inspired by the collaborative relationship between gatekeepers and enforcement authorities in anti-money laundering, we develop a theoretical framework that explains why this approach could operate as a general template for financial regulation. We then investigate the implementation of the collaborative model in practice. Starting from anti-money-laundering laws’ history, we present new evidence from recently released archival materials to illustrate that, rather than fighting proposals for expanding their regulatory obligations, private industry embraced them. Turning to the present, we discuss how the collaborative model has reshaped banking oversight in money laundering: It has leveraged the power of big data, encouraged the creation of dedicated compliance departments, and spearheaded one of the biggest inter-agency collaborations in the United States. Finally, we discuss how the collaborative model could work in the future in two other areas of financial activity: broker-dealer regulation and equity issuance

Market Entry in E-Commerce

We analyze the behavior of start-ups in e-commerce, namely on Austria's leading price-comparison-site, a multi-product environment with almost complete information. We use weekly panel data on price-quotes of digicams, Audio/HiFi-equipment and hardware. We furthermore use advanced estimation methods, which, having only recently been introduced to IO, aim at using a minimum of modeling assumptions. Thus, being able to trace the behavior of roughly 350 start-up companies and 600 incumbents, we investigate whether start-ups have a different composition of product-portfolios, charge lower prices and offer fewer goods