Abstract Online platforms, such as App Store and Kindle, are facing a common dilemma: while the implementation of technology-based protection impedes piracy and hence boosts demand from legal users (positive effect), the resulting restriction meanwhile imposes some level of disutility on the same due to inconvenience (negative effect). This paper investigates a monopolistic platform’s optimal protection level and pricing strategy under an agency business model (content agency model or advertising agency model). We find that the platform’s protection strategy hinges on the relative magnitude of the two opposing effects of protection. When the negative effect dominates, the minimal protection is optimal. However, as the positive effect becomes more salient, the platform has an incentive to increase the protection level. We also find that although the demand of non-pure platform users always increases as the level of content substitutability rises under the minimal and maximal protection regions, it is not necessarily the case under the medium protection region. The study advances our understanding of the content protection against piracy from a platform’s perspective. Our findings also provide insights into business model decision when platform protection is endogenously determined.

中文翻译：

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内容可替代性下平台保护的经济分析

摘要 在线平台，如 App Store 和 Kindle，面临着一个共同的困境：基于技术的保护的实施阻碍了盗版，从而增加了合法用户的需求（积极效应），由此产生的限制同时对同样由于不便（负面影响）。本文研究了代理商业模式（内容代理模式或广告代理模式）下垄断平台的最优保护水平和定价策略。我们发现平台的保护策略取决于保护的两种对立效果的相对大小。当负面影响占主导地位时，最低限度的保护是最佳的。然而，随着积极影响变得更加突出，平台有动力提高保护水平。我们还发现，尽管在最小和最大保护区域下，非纯平台用户的需求总是随着内容可替代性水平的提高而增加，但在中等保护区域下却不一定如此。该研究从平台的角度增进了我们对防止盗版的内容保护的理解。我们的研究结果还为内生确定平台保护时的商业模式决策提供了见解。