Abstract: With piracy existing in the information products market, a monopoly manufacturer's selection of user co-design is examined. Based on the consumer individual rationality and incentive compatibility, as well as the basic utility model, according to whether the pirated products present in the information product market and the original manufacturers choose user co-design or not, four mathematical models, respectively, NS, NC, and are set up. By comparing the results of the four models the following conclusions can be drawn. Firstly, when manufacturers choose user co-design, monopoly manufacturer's profit in the NC model is higher than monopoly manufacturer's profit in the YC model, and monopoly manufacturer's profit decreases with the reduction of user's co-design efforts. Secondly, when the consumers' valuation to legitimate information products is small, the user's co-design efforts level in YC model is higher than the user's co-design efforts level in YC model. When the consumers' valuation to commercial information products is large, the user's co-design efforts level in YC model is lower than the user's co-design efforts level in YC model. Thirdly, regardless of there being pirated products in the information market or not, the manufacturer's market share when the manufacturer chooses the user co-design is lower than the manufacturer's market share while the manufacturer does not choose the user co-design. Finally, regardless of there being pirated products in the information market or not, when the quality of commercial information products is low, the price of the commercial information products as the manufacturer chooses co-design is lower than the price when the manufacturer does not choose co-design. When the quality of commercial information products is high, the price of the commercial information products as the manufacturer chooses co-design is higher than the price when the manufacturer does not choose co-design.

Key words: information products, user co-design, piracy, network externalities