Efficient Capacity Pricing of the Internet Services
The paper examines the possibilities to improve efficiency in Internet pricing by introducing pre-purchase contract. One can regard pre-purchase market as a device for providing guaranteed services and as an alternative to smart market that can implement expected capacity pricing in an efficient manner. We find that the pre-purchase market tends to discriminate against the consumers who are less certain about their demands. We provide a condition under which the discriminatory effect is overwhelmed by the market force, which discourages the consumers with lower value by high premium. We also suggest a solution to the discriminatory effect.
|Date of creation:||2005|
|Date of revision:|
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- Apostolopoulos, Theodore & Courcoubetis, Costas & Cohen, Sandra & Psiakki, Xanthi, 2000. "Multiple incentive internet pricing for national academic research networks: a case study," Telecommunications Policy, Elsevier, vol. 24(6-7), pages 591-611, August.
- McKnight, Lee W. & Boroumand, Jahangir, 2000. "Pricing Internet services: after flat rate," Telecommunications Policy, Elsevier, vol. 24(6-7), pages 565-590, August.
- R. Arnott & A. de Palma & R. Lindsey, 1997.
"Information and time-of-usage decisions in the bottleneck model with stochastic capacity and demand,"
THEMA Working Papers
97-13, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1999. "Information and time-of-usage decisions in the bottleneck model with stochastic capacity and demand," European Economic Review, Elsevier, vol. 43(3), pages 525-548, March.
- Richard Arnott & Andre de Palma & Robin Lindsey, 1996. "Information and Time-of-Usage Decisions in the Bottleneck Model with Stochastic Capacity and Demand," Boston College Working Papers in Economics 355., Boston College Department of Economics.
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