Research On Optimal Pricing Strategies And Revenue Models For Information Products

With the integration of information technology and economic society,recent years have wistnessed the rapid developerment of information consumption.The field of information products has become one of the most innovative and the fastest growing industrial fields.Based on the theories and methods in management,economics and computer sceience,we consider unique economic features of information products as well as the behavior characteristics of firms and consumers to investigate typical pricing strategies and revenue models for information products.Main work and contributions of this paper are summarized as follows.Firstly,we develop a model to examine the impact of the customer heterogeneity on the optimal pricing schemes of customized bundles.The customers are heterogenous on the valuation that a customer sets for his/her most favorite information product,and the total quantity of information goods with positive valuations that a customer requires.Analytical results indicate that the two features have different effects on the design of customized bundles.Specifically,optimal bundle size shrinks or remains unchanged with increased customer heterogeneity on the total quantities of information goods with positive valuations,but it grows or stays the same when customers have larger heterogeneity on the valuations of their most favorite information goods.Secondly,we propose a two-period game model to investigate the impact of the network externatlity on the optimal design of intertemporal mixed bundling strategy,where the monopolist decides the optimal time of bundle release,the adoption of Complete My Bundle option and the price settings.We demonstrate that the seller should promptly release the bundle when the network externality is large,or delay the bundle release when the network externality is small.Offering Complete My Bundle option is advantageous in a large number of situations when the seller makes an optimal choice for the time of bundle release.Thirdly,considering the product fit uncertainty as well as the product differentiation on the quality dimension and the fit dimension,we develop a game model to examine the optimal design of versioning strategy in a duopoly setting,where the two app developers decide to offer a free basic app with the in-app purchases or to offer a paid app.We find that,the app developer may suffer from a reduction of the product fit uncertainty.With a higher intrinsic value of the app or a higher strength of consumer preference,the app developer's strategy depends on the reduction of product fit uncertainty caused by free trials.Fourthly,we examine a video-sharing platform that considers adopting a revenue model: pure advertising,pure subscription,or the hybrid.We model the decision process of and the interactions among each of the three parties on the platform: the platform owner,heterogeneous video providers and heterogeneous viewers.We examine the conditions of the platform owner choosing each revenue model,and the impacts of the choices on each video provider's profit,each viewer's utility and the social welfare.We find that the ad nuisance,the ad revenue rate,and the marginal quality-production cost are key factors that affect the platform owner's choice of a revenue model,the platform owner's profit,each video provider's profit,each viewer's utility and the social welfare.This paper contributes to the related literature on information products,and explains the empirical observations of new economic phenomena,and provides insights and guidelines for digital product firms to design pricing strategies and to choose revenue models.