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

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  • Chappell, Henry
  • Guimaraes, Paulo
  • Ozturk, Orgul

Abstract

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.

Suggested Citation

  • Chappell, Henry & Guimaraes, Paulo & Ozturk, Orgul, 2006. "Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good," MPRA Paper 10106, University Library of Munich, Germany, revised 2008.
    • Handle: RePEc:pra:mprapa:10106
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    References listed on IDEAS

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    1. Brian Kahin & Hal R. Varian (ed.), 2000. "Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611597, December.
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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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