Versioning Information Goods with Network Externalities

Positive externalities characterize the consumption of a majority class of information goods and services such as software, e-mail, and online content and services including virtual communities. We show that network externality is critical for the market segmentation and product line decisions of an information goods seller. With externality, a monopoly of multiple existing products offers exactly two distinct qualities. When development costs are taken into account, the low quality is developed only if the gain in revenue due to an enlarged network exceeds the extra development costs. In particular, if developed, the low quality should be offered for free under very general conditions. Network externality itself thus can explain the market provision of free information goods by proprietary sellers from a product line design perspective

Differentiation With Shared Features And Cannibalization Of Information Goods

Large sunk cost of development, negligible cost of reproduction and distribution and substantial economies of scale make information goods distinct from industry goods. In this paper, we analyse versioning strategies of horizontally differentiated information goods with shared feature sets, discrete hierarchical groups and continuous individual consumer tastes. Based on our modelling results, when cannibalization is considered among different market segments, it is always sub-optimal to differentiate information goods if market is not fully differentiated or characteristics of the information goods are not specifically designed to relate to certain market segments

Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good

We investigate profit-maximizing versioning plans for an information goods monopolist. The analysis employs data obtained from a web-based field experiment in which potential buyers were offered information goods in varied price-quality configurations. Maximum simulated likelihood (MSL) methods are used to estimate parameters describing the distribution of utility function parameters across potential buyers of the good. The resulting estimates are used to examine the impact of versioning on seller profits and market efficiency.Versioning, price discrimination, field experiment, maximum simulated likelihood

An Overview of Information Goods Pricing

[[abstract]]Although information economy has been the focus of considerable research, no unified and exhaustive classification model for current pricing methods exists. This work presents a novel unifying pricing framework. Each category in the framework is defined by the structural elements that accounts for its behaviour and particular aims. This work also identifies the implicit joints among categories as the basis for optimising prices (only in terms of different perspectives). The benefits of the unifying framework are that it provides a conceptual abstract model that differentiates between different pricing methods, and positions the future effectual pricing methods.[[journaltype]]國

Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good

We investigate profit-maximizing versioning plans for an information goods monopolist. The analysis employs data obtained from a web-based field experiment in which potential buyers were offered information goods in varied price-quality configurations. Maximum simulated likelihood (MSL) methods are used to estimate parameters describing the distribution of utility function parameters across potential buyers of the good. The resulting estimates are used to examine the impact of versioning on seller profits and market efficiency

Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good

We investigate profit-maximizing versioning plans for an information goods monopolist. The analysis employs data obtained from a web-based field experiment in which potential buyers were offered information goods in varied price-quality configurations. Maximum simulated likelihood (MSL) methods are used to estimate parameters describing the distribution of utility function parameters across potential buyers of the good. The resulting estimates are used to examine the impact of versioning on seller profits and market efficiency