Thông tin về nhu cầu của người tiêu dùng có được thông qua nhiều kênh: phân tích thông tin của người tiêu dùng bị bắt giữ với lòng trung thành của thẻ tại điểm bán hàng, khai thác dữ liệu và hệ thống đặt hàng chiến lược trong kho dữ liệu chuyên dụng, | On Software Piracy 185 The profit of the original software firm is n 1 -tf- q X 8 and that of the pirate is q 1 - q The following result summarizes the impact of the presence of the pirate in the market under network externality. Proposition 1 In the presence of network externality when the pirate is present in the market the demand for the original firm is higher than its demand under protection while price under piracy is lower than under protection. Formally D D nd P o P Proof Follows after comparing and simplifying 2 with 6 and 1 with 4 respectively. . So under network externality the presence of the pirate has a positive effect on the original firm s demand as expected but a dampening effect on the price due to competition. Under this we are interested to see how these two opposing effects combine and what would be a more profitable situation for the original firm between piracy and protection. Protection versus Non-Protection We compare between the profits of the original software firm under protection and nonprotection. Proposition 2 In the presence of network externality given a choice between employing protection and non-protection it is always profitable for the original software developer to protect its software. Copyright 2005 Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. TLFeBOOK 186 Poddar Proof To show that rif - n O 0 Observe that nNP - n 1 1 4 1 - q 1 -Oq ---- ------ ---- ----77 1 -0 4 4 - q - 30q q2 - 8qO - 10ớq2 8q 90 2q2 4 1 -O 4 - q - 3Oq 2 The denominator of the above expression is non-negative. We have to show that the numerator is non-negative for all 0 and q. Simplifying the numerator we get 1 - ớ 8q - q2 9ớ - 1 to make it positive we must have 0 8 q 9q which is always true for all q e and 0 e . Note that 9 is decreasing in q. . This result is interesting since under network externality when the pirate is present in the market even if there is
