Economic Analysis on "Illegal-server" Problem Based on Hotelling Model

In this paper, by making a Hotelling model, the author try to analyze the "illegal-server" problem. Firstly, the author put forward several hypotheses, then the author analyze the reaction of players and provides under such hypotheses, lastly, some economic and policy suggestions are given to deal with this problem in on-line game industry. Because there is still not enough academic analysis concerned with "illegal-server" problem, the author think this paper have some academic value for further study.