Pricing in online markets has been of much interest to academics and practitioners, particularly for unique IT services. In this paper, we theorize and empirically examine three primary factors that affect provider pricing of outsourced IT services: production cost, competitive dynamics (accounting for competitors’ attributes) and frictional cost (accounting for buyers’ information). We test th...

Abstract Purpose of Review Competitive electricity systems arose in the context thermal generation with dispatchable production and increasing variable costs. This paper addresses key impacts on efficient market design reliance renewable energy sources such as solar wind that are intermittent have very low marginal Recent Findings The basics markets been adopted by all organized USA. is only co...

This paper demonstrates that quality-contingent pricing is a useful mechanism for mitigating the negative effects of quality uncertainty in e-commerce and information technology services. Under contingency pricing of an information good or service, the firm pre-announces a rebate for poor performance. Consumers determine performance probabilities using publicly available historical performance ...

We study the adoption patterns of two competing technologies as well as the effectiveness and optimality of viral pricing strategies. Our model considers two incompatible technologies of differing quality and a market in which valuations are heterogeneous and subject to externalities. We provide partial characterization results about the structure and robustness of equilibria and give condition...

Pay What You Want (PWYW) and Name Your Own Price (NYOP) are customer-driven pricing mechanisms that give customers (some) pricing power and that have been used in service industries with high fixed costs to price discriminate without setting a reference price. This paper describes buyer and seller data in a series of induced-value laboratory experiments that compare PWYW and NYOP in monopoly an...

It is a critical time to upgrade technology and increase value added with manufacturing skills developing and management strategies that will highly satisfy the customers need in the precision machinery global market. In recent years, the supply side, each precision machinery manufacturers in each country are facing the pressures of price reducing from the demand side voices that pushes the hig...

Geographic price discrimination is generally considered beneficial to firm profitability. However, theoretical results point to conditions under which firms might prefer to price uniformly across markets in oligopolistic settings. This paper provides an empirical analysis of competitive price discrimination and quantitatively assesses the profitability of national pricing relative to store-leve...

Despite the empirical relevance of advertising strategies in concentrated markets, the economics literature is largely silent on the effect of persuasive advertising strategies on pricing, market structure and increasing (or decreasing) dominance. In a simple model of persuasive advertising and pricing with differentiated goods, we analyze the interdependencies between ex-ante asymmetries in co...

During the past few years information has increasingly become a commodity. As a commodity the atypical cost structure of information goods in competitive markets result in the price of reproduction of information goods tending to zero implying that market failure is highly likely. Intellectual property rights prevent such market failure by protecting the ability of creators and/or distributors ...

Retail real-time pricing (RTP) of electricity – retail pricing that changes hourly to reflect the changing supply/demand balance – is very appealing to economists because it “sends the right price signals.” Economic efficiency gains from RTP, however, are often confused with the short-term wealth transfers from producers to consumers that RTP can create. Abstracting from transfers, I focus on t...