Pricing Strategy of Online Knowledge Market: The Analysis of Google Answers

This article addresses the different levels of pricing strategies for an online knowledge market. Based on the best practice from Google Answers, an online knowledge market is modeled as a marketplace where consumers ask and researchers answer questions to make knowledge transactions. Consumers optimally price their questions to obtain answers, and a firm maintains the online knowledge market by determining the optimal price allocation to researchers. Our study identifies two types of consumers, spin-off and mainstream, based on whether additional utilities will be derived from the market. In addition, we investigate how the firm can use minimal and maximal posting prices to regulate the knowledge market. IntroductIon: onlIne knowledge MArket Recent years have seen an enormous growth and development of e-business. Internet technologies have revolutionized the shopping behaviors of consumers and the ways firms are doing business. Firms launch electronic storefronts to advertise their products and attract consumers to shop online. According to the Global e-Commerce Report by the Taylor Nelson Sofres (TNS) in 2002, 28% of global Internet users and 32% of U.S. Internet users have shopped online already or plan to do so. The TNS report also indicates that U.S. is the nation with the greatest proportion of Internet users in the world who are engaged in online shopping. Although online security remains the biggest single concern for those Internet users