Pricing for Electronic Commerce
AbstractPerhaps the greatest technological innovation of the next several decades will be universal access and utilization of the Internet. Already congestion is becoming a serious impediment to efficient utilization. We introduce a stochastic equilibrium concept for a general mathematical model of the Internet, and demonstrate that the efficient social welfare maximizing stochastic allocation of Internet traffic can be supported by optimal congestion prices. We further demonstrate via simulation modelling that approximately optimal prices can be readily computed and implemented in a decentralized system. We further propose simulation modeling to study the impact of private strategic pricing and public policies.
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Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 1996 with number _054.
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Postal: Department of Econometrics, University of Geneva, 102 Bd Carl-Vogt, 1211 Geneva 4, Switzerland
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- Mackie-Mason, J.K. & Varian, H.R., 1993.
"Pricing the Internet,"
20/1993, Oslo University, Department of Economics.
- Stahl, Dale II, 1986. "Stochastic decentralization of competitive allocations," Economics Letters, Elsevier, vol. 22(2-3), pages 111-113.
- Naor, P, 1969. "The Regulation of Queue Size by Levying Tolls," Econometrica, Econometric Society, vol. 37(1), pages 15-24, January.
- Hau Leung Lee & Morris A. Cohen, 1985. "Multi-Agent Customer Allocation in a Stochastic Service System," Management Science, INFORMS, vol. 31(6), pages 752-763, June.
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