Nonlinear pricing of information goods

This paper analyzes optimal pricing for information goods under incomplete information, when both unlimited-usage (fixed-fee) pricing and usage-based pricing are feasible, and administering usage-based pricing may involve transaction costs. It is shown that offering fixed- fee pricing in addition to a non-linear usage-based pricing scheme is always profit-improving in the presence of any non-zero transaction costs, and there may be markets in which a pure fixed-fee is optimal. This implies that the optimal pricing strategy for information goods is almost never fully revealing. Moreover, it is proved that the optimal usage-based pricing schedule is independent of the value of the fixed- fee, a result that simplifies the simultaneous design of pricing schedules considerably, and provides a simple procedure for determining the optimal combination of fixed-fee and non-linear usage-based pricing. The introduction of fixed-fee pricing is shown to increase both consumer surplus and total surplus. The differential effects of setup costs, fixed transaction costs and variable transaction costs on pricing policy are described. These results suggests a number of managerial guidelines for designing pricing schedules. For instance, in nascent information markets, firms may profit from low fixed-fee penetration pricing, but as these markets mature, the optimal pricing mix should expand to include a wider range of usage-based pricing options. The extent of minimum fees, quantity discounts and adoption levels across the different pricing schemes are characterized, strategic pricing responses to changes in market characteristics are described, and the implications of the paper's results for bundling and vertical differentiation of information goods are discussed.nonlinear pricing, screening, digital goods, information goods, fixed-fee, usage-based pricing, transaction costs

The Roles of Corporate IT Infastructure and their Impact on IS Effectiveness

In the strategic alignment model of Henderson and Venkatraman (1993) [1] IT infrastructure has an important but only implicitly defined role. According to evolving literature, IT infrastructure serves many different purposes in large companies. We outline the main missions (roles) of the corporate-wide IT infrastructure and its contribution to IS effectiveness and study the relationship of IT infrastructure with alignment processes and strategic integration. Our empirical tests with data from almost one hundred large companies resulted in three IT infrastructure roles, which reflect the IS communality, strategic, and flexibility dimensions of the corporate-wide IT infrastructure. The roles were not symmetrically related to the IS effectiveness and alignment perspectives. IT infrastructure roles had a significant interplay with strategic integration in improving IS effectiveness. However, the interplay of IT infrastructure roles with alignment perspectives had only marginal effects. Implications of the results for research and practice are discussed

Pricing music using personal data: mutually advantageous first-degree price discrimination

In addition to customized products and services, personal data also enables personalized pricing. However, consumers are often unwilling to accept being price discriminated for fear that they would end up paying more for the same product or service. This article demonstrates that by rewarding consumers for disclosing personal information it is possible to achieve a situation where first-degree price discrimination is mutually advantageous and both buyers and sellers gain by adopting such a pricing model. The conditions required for this to happen are investigated and the impact on social welfare is discussed. Finally, the article considers the robustness of this model when consumers adopt an opportunistic behavior which consists in manipulating personal data in order to masquerade as a consumer with a lower willingness to pay

Abusing data dominance in the digital market. The application of merger control and article 102 TFEU to data-related conducts.

The internet and digital technologies revolutionized the economy. Regulating the digital market has become a priority for the European Union. While promoting innovation and development, EU institutions must assure that the digital market maintains a competitive structure. Among the numerous elements characterizing the digital sector, users’ data are particularly important. Digital services are centered around personal data, the accumulation of which contributed to the centralization of market power in the hands of a few large providers. As a result, data-driven mergers and data-related abuses gained a central role for the purposes of EU antitrust enforcement. In light of these considerations, this work aims at assessing whether EU competition law is well-suited to address data-driven mergers and data-related abuses of dominance. These conducts are of crucial importance to the maintenance of competition in the digital sector, insofar as the accumulation of users’ data constitutes a fundamental competitive advantage. To begin with, part 1 addresses the specific features of the digital market and their impact on the definition of the relevant market and the assessment of dominance by antitrust authorities. Secondly, part 2 analyzes the EU’s case law on data-driven mergers to verify if merger control is well-suited to address these concentrations. Thirdly, part 3 discusses abuses of dominance in the phase of data collection and the legal frameworks applicable to these conducts. Fourthly, part 4 focuses on access to “essential” datasets and the indirect effects of anticompetitive conducts on rivals’ ability to access users’ information. Finally, Part 5 discusses differential pricing practices implemented online and based on personal data. As it will be assessed, the combination of an efficient competition law enforcement and the auspicial adoption of a specific regulation seems to be the best solution to face the challenges raised by “data-related dominance”

The Media Industry's Structural Transformation in Capitalism and the Role of the State: Media Economics in the Age of Digital Communication

Abstract: This paper discusses how the capitalist media industry has been structurally transformed in the age of digital communications. It takes an approach that is grounded in the Marxian critique of the political economy of the media. It draws a distinction between media capital, media-oriented capital, media infrastructure capital and media-external capital as the forms of capital in the media industry. The article identifies four capital strategies that media capital tends to use in order to try to maximise profits: a) The substitution of “old” by “new” media technology, b) the introduction of new transmission channels for “old” media products, c) the definition of new property rights for media sectors and networks, d) the reduction of production and transaction costs. The drive to profit maximization is at the heart of the capitalist media industry’s structural transformation. This work also discusses the tendency to the universalization of the media system in the digital age and the economic contradictions arising from it. It identifies activity fields of the media industry’s structural transformation and shows how the concentration of the capitalist media markets is an essential, contradictory and inherent feature of the capitalist media system and its structural transformation. The paper identifies six causes of why capital seeks to employ capital strategies that result in the media industry’s structural transformation. They include market saturation, overaccumulation, the tendency of the profit rate to fall, capital-concentration, competition pressure, and advertising. The paper finally discusses the role of the state as an agent of capital in general and media capital in particular. It discusses the role of the state in privatisations, neoliberal deregulation, the formation of national competitive states, and various benefits that the state provides for media capital. This contribution shows that capital and capitalism are the main structural transformers of the media and communications system. For understanding these transformations, we need an approach that is grounded in Marx’s critique of the political economy. Translation from German: Christian Fuchs and Marisol Sandova

Microeconomic Theory

This open education textbook is comprised of two parts: Analytical Methods of Economics and Intermediate Microeconomics. Each part supports courses (ECON 201 & ECON 300) in Haverford College\u27s Economics curriculum. Use of this work governed by a CC BY-NC license

Business process model repositories : efficient process retrieval

As organizations increasingly work in process-oriented manner, the number of business process models that they develop and have to maintain increases. As a consequence, it has become common for organizations to have collections of hundreds or even thousands of business process models. When a collection contains such a large number of business process models, it is impossible to manage that collection manually. Therefore, Business Process (BP) Model Repositories are required that store large collections of process models and provide techniques for managing these collections automatically and efficiently. The goal of research described in this thesis is to improve on existing BP Model Repositories, by improving the management techniques that are supported by these repositories on an aspect that has received little attention so far. Looking ahead at the results of the research, the aspect that will be selected for improvement is the process retrieval aspect. The two main research activities that will be carried in the context of this research are the following. Firstly, a survey of Business Process Model Repositories is performed to identity an unsolved aspect to be enhanced. The functionality of existing BP Model Repositories is listed and summarized as a framework for BP Model Repositories. After comparing the functionality that is provided by existing BP Model Repositories, based on the framework, efficient process retrieval is selected as the aspect that will be improved. This aspect is selected, because, although existing BP Model Repositories provide techniques for process retrieval, none of them focus on the efficiency of process retrieval. Secondly, an indexing technique for process retrieval (both process similarity search and process querying) is proposed. The index is constructed using features of process models. Features are small and characteristic fragments of process models. As such, by matching features of a given query/search model and features of a process model in a collection, a small set of models in the collection that potentially match the query/search model can be retrieved efficiently through the index. Techniques are also proposed to further check whether a potential match is an actual match for the query/search model. All of the above techniques are implemented as a component of the AProMoRe (an Advanced Process Model Repository) process repository. To evaluate the proposed process retrieval techniques, experiments are run using both real-life and synthetic process model collections. Experimental results show that on average the process retrieval techniques proposed in this thesis performs at least one order of magnitude faster than existing techniques

Vers une utilisation de la diversité de chemins dans l'internet

In this thesis we consider a new service where carriers offer additional routes to their customers (w.r.t. to the BGP default route) as a free or value-added service. These alternate routes can be used by customers to optimize their communications, by bypassing some congested points in the Internet (e.g. a “tussled” peeringpoints), to help them to meet their traffic engineering objectives (better delays etc.) or just for robustness purposes (e.g, shift to a disjoint alternate route if needed). First we propose a simple architecture that allows a network service provider to benefit from the diversity it currently receives. Then we extend this architecture in order to make the propagation of the Internet path diversity possible, not only to direct neighbors but also to their neighbors and so on. We take advantage of this advance to relax the route selection processes of autonomous systems in order to make them be able to set up new routing paradigms. Nevertheless announcing additional paths can lead to scalability issues, so each carrier could receive more paths than what it could manage. We quantify this issue and we underline easy adaptations and small path filterings which make the number of paths drop to a manageable amount. Last but not least we set up an auction-type route allocation framework, which gives to network service providers the opportunities first to propagate to their neighbors only the paths the said neighbors are interested in and second to leverage a new routing selection paradigm based on commercial agreements and negotiationsNous considérons, dans cette thèse, un nouveau service par lequel les opérateurs de télécommunications offrent des routes supplémentaires à leurs clients (en plus de la route par défaut) comme un service gratuit ou à valeur ajoutée. Ces routes supplémentaires peuvent être utilisées par des clients afin d’optimiser leurs communications, en outrepassant des points de congestion d’Internet, ou les aider à atteindre leurs objectifs d’ingénierie de trafic (meilleurs délais etc.) ou dans un but de robustesse. Nous proposons d’abord une architecture simple permettant à un opérateur de télécommunication de bénéficier de la diversité de chemin qu’il reçoit déjà. Nous étendons ensuite cette architecture afin de rendre possible la propagation de cette diversité de chemin, non seulement aux voisins directs mais aussi, de proche en proche, aux autres domaines. Nous profitons de cette occasion pour relaxer la sélection des routes des différents domaines afin de leur permettre de mettre en place de nouveaux paradigmes de routage. Néanmoins, annoncer des chemins additionnels peut entrainer des problèmes de passage à l’échelle car chaque opérateur peut potentiellement recevoir plus de chemins que ce qu’il peut gérer. Nous quantifions ce problème et mettons en avant des modifications et filtrages simples permettant de réduire ce nombre à un niveau acceptable. En dernier, nous proposons un processus, inspiré des ventes aux enchères, permettant aux opérateurs de propager aux domaines voisins seulement les chemins qui intéressent les dits voisins. De plus, ce processus permet de mettre en avant un nouveau paradigme de propagation de routes, basé sur des négociations et accords commerciau