Positive externalities characterize the consumption of a majority of information goods such as software and online content services including virtual communities. We show that network externality is critical for the market segmentation and product line structure of such information goods. A monopoly of multiple existing products offers exactly two distinct qualities. Essential for such a limite...

This paper investigates bundle pricing under imperfect competition. In a multiproduct context, we first examine how substitution/complementarity relationships among products can affect pricing. This is used to motivate multi-product generalizations of the Herfindahl-Hirschmann index (GHHI) capturing cross-market effects of imperfect competition on bundle pricing. The GHHI model is applied to pr...

With the aid of Taylor-based approximations, this paper presents results for pricing insurance contracts by using indifference pricing under general utility functions. We discuss the connection between the resulting “theoretical” indifference prices and the pricing rule-of-thumb that practitioners use: Best Estimate plus a “Market Value Margin”. Furthermore, we compare our approximations with k...

Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Abstract: This paper investigates bundle pricing under imperfect competition. In a multiproduct context, we first examine how substitution/complementarity relationships among products can affect pricing. This is used to motivate multi-produc...

In this paper, impacts of day-ahead market pricing on behavior of producers and consumers in option and day-ahead markets and on option pricing are studied. To this end, two comprehensive equilibrium models for joint put option and day-ahead markets under pay-as-bid and uniform pricing in day-ahead market are presented, respectively. Interaction between put option and day-ahead markets, uncerta...

The volatile and intermittent nature of renewable energy sources (RES) has a critical impact on electric power grid operations. However, there still lacks model to price the uncertainty in electricity markets. This paper aims propose quantify RES system operating costs an market environment considering use flexible ramping (FR) products, compensation for wind curtailment, cost load thus offer m...

With the increasing use of different types of auctions in market designing, modeling of participants’ behaviors to evaluate the market structure is one of the main discussions in the studies related to the deregulated power industries. In this article, we apply an approach of the optimal bidding behavior to the Iran wholesale electricity market as a restructured electric power industry and mode...