The Digital Content of Manufacturer Gaming Based on the Stackberg Model

This paper conducts an analysis on competitive equilibrium between digital content vendors and piracy manufacturers using the Stackberg model of production competition, and find out that in the traditional environment, the marginal cost of legitimate products is higher than the pirated products, and that the market share of legitimate products is far less than the pirated products; in the network environment, the marginal cost of legitimate products significantly reduces, and may even be lower than that of the pirated products. With the increase in aggregate demand of the market, the sales of pirated products declines and the market share of legitimate products significantly increases.