Grad School Archive

Papers

Be warned: simply being in grad school didn’t make me enough of a nerd, so I decided to study subjects that are nerdy even by the standards of nerdy grad students (click titles to see abstract).

Market Size, Wealth, Network Effects, and Digital Piracy

Abstract. The effect of digital piracy is often framed as a creator having to compete against unauthorized copies of their own creation, despite intellectual property rights laws. This framing has empirical and theoretical support, but the empirical findings often suggest that the magnitude and even sign of piracy effects depend on the characteristics of the software and the market. For example, piracy seems to have a larger negative effect on sales of high-profile works, but a smaller and perhaps even positive effect on lesser-known works. This paper seeks a theoretical explanation of differential piracy effects. It is unique in that it gives considerable focus to the market size, and also to budgetary limitations of the consumer base, motivated by high piracy rates in developing countries. The models imply that piracy is more likely to help developers when the market for the software is smaller; when network effects are neither too weak nor too strong; when piracy is neither to accessible nor too inaccessible; when the cost of piracy is relatively homogeneous; and when the consumer base is not too poor. All things considered, the inclusion of market size, consumer budgets, and heterogeneous piracy costs suggest that piracy is less likely to be beneficial to developers than previous literature suggest. Developer profit may be higher or lower with piracy, but buyer welfare is no worse, and is sometimes better, with piracy.

The Effect of Bypassing Denuvo DRM on PC Video Games

Abstract. A digital good can be duplicated and distributed at nearly zero cost by anyone with a copy. Although it is typically a violation of intellectual property laws to do so, the Internet has made digital piracy a significant concern for developers who wish to sell their software: developers may find themselves essentially competing against pirated copies of their own software. In the personal computer video game market, a digital rights management (DRM) technology called Denuvo has been used since 2014 to restrict software usage to legitimate buyers. Sometimes Denuvo DRM is cracked, after which piracy can occur. I exploit the randomness with which Denuvo DRM is cracked to estimate the effect that Denuvo DRM survival time has on protecting revenue from the effects of piracy. When Denuvo DRM is quickly cracked, piracy leads to an estimated 20 percent fall in total revenue on average relative to an uncracked counterfactual, but that effect is weaker the longer it takes for Denuvo DRM to be cracked. When Denuvo DRM survives for at least 12 weeks, piracy leads to nearly zero total revenue loss on average. These results suggest that Denuvo DRM does protect legitimate sales, but there is little justification to employ Denuvo DRM long-term (i.e. for more than three months), especially given that Denuvo DRM is generally disliked by legitimate buyers.

An Economic Model of Disutility of DRM

Abstract. I develop a model in which software developers can choose to respond to the anticipated presence of piracy either by undercutting piracy or by acquiring costly digital rights management (DRM) technology from a third-party DRM provider. DRM works by delaying the availability of pirated copies to an uncertain future time, incentivizing impatient consumers to purchase a legitimate copy immediately. DRM, however, is disliked by consumers and is therefore a source of disutility. The model implies that unobstructed piracy, when accessible enough, reduces developer profit, and the reduction in profit is more severe for developers in larger markets. DRM, provided it is not too costly or too annoying to users, increases a developer’s expected profit and the welfare of those who purchase the software relative to unobstructed piracy. Furthermore, the model suggests that developers can increase expected profit by credibly agreeing to remove DRM from legitimate copies after DRM has been cracked, but it is not necessarily true that the eventual removal of DRM increases expected buyer welfare relative to indefinitely retained DRM.

Mini-Research

Old Materials

I tend to write cheat sheets, formula sheets, and other useful (hopefully) materials. I archive some here for posterity (click below to expand).

ECN 101 - Intermediate Macro
ECN 102 - Analysis of Econ Data (Stata)
ECN 102 - Analysis of Econ Data (R)

When using interactive scripts, press Shift + Enter to proceed step-by-step; or click on Runtime -> Run all to run the entire script. It will give a warning but I can assure you that my R script will not steal your credit card information.

ECN 121 - Industrial Organization II
ECN 134 - Financial Economics
ECN 160B - International Macro
Miscellaneous Notes

Courses TAed

Teaching Evaluations, Overall Histogram

2021-2022
2020-2021
2019-2020
2018-2019
2017-2018
2016-2017