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Efficient Capacity Pricing of the Internet Services

Chang-Ho Yoon (), Young-Woong Song and Byoung Jun ()
Additional contact information
Chang-Ho Yoon: Department of Economics, Korea University
Young-Woong Song: SK Research Institute for SUPEX Management

No 508, Discussion Paper Series from Institute of Economic Research, Korea University

Abstract: The paper examines the possibilities to improve efficiency in Internet pricing by introducing pre-purchase contract. One can regard pre-purchase market as a device for providing guaranteed services and as an alternative to smart market that can implement expected capacity pricing in an efficient manner. We find that the pre-purchase market tends to discriminate against the consumers who are less certain about their demands. We provide a condition under which the discriminatory effect is overwhelmed by the market force, which discourages the consumers with lower value by high premium. We also suggest a solution to the discriminatory effect.

Keywords: Network congestion; Pre-purchase; Edge pricing; Smart market; Internet pricing (search for similar items in EconPapers)
JEL-codes: D60 D81 L86 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-mkt
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
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