Designing professional services: Pricing and prioritization

We study the optimal design of a professional service in mixed market customers with heterogeneous skills and capabilities using such service. Expert can avail on their own, whereas amateur find it challenging to deploy only procure through an intermediary who resolves technical issues. develop model that captures essential trade-offs settings: heterogeneity customer expertise, decentralization between provider intermediary, congestion due limited capacity. analyze how expertise differences drive equilibrium outcomes under various pricing priority schemes. sufficient base allows expert “free-ride” single pricing. Price discrimination fully allay free-riding, but may prices downward. also favors First-Come-First-Served (FCFS) policy, preference is generally reversed prioritization. Specifically, prioritizing bring revenue welfare gains relative FCFS policy prioritizes customers. Our results offer normative guidelines for managing services, clarifying regimes price discrimination, along implications.