DeCSS, crypto, law, and economics

[William Allen Simpson]

I thought I made a fairly clear and cogent original synopsis, but apparently we're heading off into religious wars. 

I'm going to invert Eric's argument:

Eric Rescorla wrote:
> William Allen Simpson <wsimpson at greendragon.com> writes:
> > The question raised was whether the commodity would be produced.  The
> > producer knows that in the PAST there was sufficient income from these
> > consumers for the goods to be profitable.
> >
> Of course, but the producer uses things like past experience and
> marketing studies to decide what they expect. There may be errors,
> but that doesn't invalidate the basic analysis, which is that if
> the producer doesn't EXPECT to make a profit they won't produce
> a product.
> 
Look, I'm sure we are all in agreement on this point, with two caveats 
already expressed earlier:
 1) producers don't just want any profit, they want the biggest possible 
    profit, and are less likely to produce something when there is 
    something else even more profitable.
 2) we have examples where producers' desire for the biggest possible
    profit stopped development of a product, the public sector stepped in, 
    and the resulting product created wealth far beyond the dreams of the 
    original -- the Internet, Harry Potter.

So, in the matter of DVDs, we all agree that the product _has_ been 
produced.  There are only artificial barriers in the market.


> > It is wrong, since it doesn't have any correspondence to the case at hand
> > (DVDs, cryptography).  In fact, it is directly contrary: (1) the producers
> > are not omniscient, and (2) the consumers have knowledge about pricing,
> > and (3) neither the producers nor the consumers act rationally.
> >
> > We can speculate forever about universes where we travel faster than the
> > speed of light, but really, I don't see why we should bother with using
> > such universes to model our current discussion.
> Maybe you live in some alternate universe where companies don't
> to practice price discrimination, but here on planet Earth,

The model (you proposed quoting Varian) required perfect knowledge of the 
producer, and complete lack of knowledge by the consumer.  That's not 
planet Earth.  The model doesn't work on planet Earth.

> companies routinely offer products at widely variable prices
> to different consumers.

Only when the consumers are unaware of the practice, and/or where the 
companies have raised a monopolistic legal barrier to *FORCE* the 
consumers to pay different prices.  

Note that some vendors are attempting to use the DMCA to prevent consumers 
learning about pricing differences, as reported Dec 2 on politechbot.com 
and 
 http://www.law.berkeley.edu/cenpro/samuelson/news/pressrelease.pdf


> > The points I was making here are (1) the terms used were wrong and (2)
> > there were no net benefits (wealth) to "society" from the monopoly.
> But that's wrong, because the monopoly allows market segmentation,
> which allows new products to be introduced that otherwise would
> not be.
> 
There has been no conclusive evidence presented here.  The Varian 
arguments presented are fallacious.  And other legal opinion presented 
here concluded otherwise.

Name us a DVD title that would not have been introduced without market 
segmentation, because it would have been unprofitable!?!?

Or is this just a religious belief?

Further deponent sayeth not.
-- 
William Allen Simpson
    Key fingerprint =  17 40 5E 67 15 6F 31 26  DD 0D B9 9B 6A 15 2C 32


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