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
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
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Journal Article: Efficient capacity pricing of the internet services (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:iek:wpaper:0508
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