Experimental Evaluation of Different Pricing Mechanisms for Content Distribution over Peer to Peer Networks

This paper extends previous work by the authors in which they propose a dynamic distribution model based on modified economic growth theory to determine file distribution patterns in peer-to-peer networks. Although the theoretical model provides a good foundation for exploring different pricing mechanisms for peer-to-peer networks, there are several issues that remain unexplored because of computational difficulties. In this paper, we use the methods of experimental economics to create a sequence of experimental designs to explore some of these issues. The designs mimic the structure of the industry, the type of current and future property rights, some technical constraints, and the strategic interactions between the different actors

Designing markets for open source production of digital culture goods

Digital culture products are easily reproduced, easily distributed, and subject to endless transmutation, extension and recombination. This sets the stage for the emergence of maturing markets for open source modes of cultural content production. This paper explores two previously unstudied structures of such markets. First, we consider a market that offers products with content access and transmutation rights to consumers and lets them personalize products in the postpurchase environment. Second, we consider an open source production model where producers can trade content access rights that let other producer reuse their content in their own production process. Our experimental results show that, as predicted by theory, total surplus under both options is larger than under the no-tradable- transmutation-rights option. The presence of open source access and transmutation rights diffuses monopoly power without hurting producers ’ profits. The paper also provides a basic experimental framework for testing many other alternative copyright arrangements and provides further understanding of issues related to the production and exchange of digital information good

On-Line Auctions with Buy-It-Now Pricing: A Practical Design Model and Experimental Evaluation

Several studies have shown that on-line consumer-to-consumer (C2C) auctions operate below their revenue and efficiency potential. From a theoretical perspective, dynamic prices should improve auction performance, but it is unclear whether this is so in practice. Experiments with economically motivated human subjects tested the benefits of using dynamic prices in on-line auctions. The subjects, as buyers or sellers in a simulated auction environment, electronically traded five virtual products and at the end of each session received cash payments based on the experimental profits they generated. The results demonstrate that a dynamic auction design using a dynamic buy-it-now pricing option increases seller surplus as well as overall operational efficiency. Contrary to previous literature, the study shows that some dynamic pricing mechanisms are relatively easy to implement and have the potential to improve current static pricing auctions. Future theoretical models of dynamic auctions should abandon assumptions that unnecessarily restrict the ways dynamic pricing can be implemented

The Seller's Experience in Consumer-to-Consumer E-Commerce

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