Chappell, Henry and Guimaraes, Paulo and Ozturk, Orgul (2006): Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good.
Download (909kB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good|
|Keywords:||Versioning, price discrimination, field experiment, maximum simulated likelihood|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology; Computer Programs > C81 - Methodology for Collecting, Estimating, and Organizing Microeconomic Data
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
D - Microeconomics > D4 - Market Structure and Pricing > D42 - Monopoly
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments
|Depositing User:||Orgul D. Ozturk|
|Date Deposited:||21. Aug 2008 01:15|
|Last Modified:||20. Feb 2013 00:00|
Acquisti, Alessandro, and Hal R. Varian, “Conditioning Prices on Purchase History,” Marketing Science, forthcoming, 2005.
Aghion, Philippe, Patrick Bolton, Christopher Harris, and Bruno Julien, “Optimal Learning by Experimentation,” The Review of Economic Studies, 1991, 58, pp. 621-654.
Arias, Carlos, and Thomas L. Cox, “Maximum Simulated Likelihood: A Brief Introduction for Practitioners.” University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Staff Paper 421, 1999.
Bakos, Yannis, and Erik Brynjolfsson, “Aggregation and Disaggregation of Information Goods: Implications for Bundling, Site Licensing, and Micropayment Systems,” in Hal R. Varian and Brian Kahin, eds., Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property (Cambridge: MIT Press), 2000, pp. 114- 137.
Esteves, Rosa Branca, “Pricing with Customer Recognition,” Working paper, Oxford University, 2005.
Gourieroux, C. and A. Monfort. “Simulation-based inference: A Survey with SpecialReference to Panel Data Models,” Journal of Econometrics, 1993, 59, pp. 5-33.
Hajivassiliou, V. and P. Ruud. “Classical Estimation Methods for LDV Models Using Simulation.” In R. Engle and D. McFadden, eds., Handbook of Econometrics (Amsterdam: North-Holland), 1994, pp. 2383-2441.
Harrison, Glenn, and John A. List, “Field Experiments” Journal of Economic Literature, 2004, 42, pp. 1009-1055.
Hoffman, Donna L. and Thomas P. Novak, “Advertising Pricing Models for the World Wide Web,” in Hal R. Varian and Brian Kahin, eds., Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property (Cambridge: MIT Press), 2000, pp. 45-61.
Jing, Bing, “Versioning Information Goods with Network Externalities,” in Soon Ang, Helmut Krcmar, Wanda J. Orlikowski, Peter Weill, Janice I. DeGross (Eds.): Proceedings of the Twenty-First International Conference on Information Systems, December 10-13, 2000 Brisbane, Australia. (Atlanta: Association for Information Systems) 2000.
Lee, L. “Asymptotic Bias in Simulated Maximum Likelihood Estimation of Discrete Choice Models.” Econometric Theory, 1995, 11, pp. 437-483.
Lerman, S. and C. Manski. “On the Use of Simulated Frequencies to Approximate Choice Probabilities,” in C. Manski, and D. McFadden, eds., Structural Analysis of Discrete Data with Econometric Applications (Cambridge: MIT Press), 1981, pp. 305-319.
Loginova, Oksana, and Curtis R. Taylor, “Price Experimentation with Strategic Buyers,” Working paper, Duke University, 2005.
Rothschild, M. “A Two-Armed Bandit Theory of Market Pricing,” Journal of Economic Theory, 1974, 9, pp. 185-202. Stern, Steven. “Simulation-Based Estimation,” Journal of Economic Literature, 1997, 35,pp. 2006-2039.
Varian, Hal R. “Versioning Information Goods,” in Hal R. Varian and Brian Kahin, eds., Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property (Cambridge: MIT Press), 2000, pp. 190-202.
Varian, Hal R. and Carl Shapiro, Information Rules (Boston: Harvard Business School Press), 1999.
Wolverton, Troy. “Now showing: random DVD prices on Amazon, ” CNET news.com, September 5, 2000 (http://news.com.com/2100-1017-245326.html?legacy=cnet).