Collaborative pricing model for bundling information goods

an article by Wei-Lun Chang (Department of BA, Tamkang University, Taiwan) and Soe-Tsyr Yuan (Department of MIS, National ChengChi University, Taiwan) in Journal of Information Science Volume 34 Number 5 (October 2008)

Abstract
The information economy engenders consideration of certain issues such as information goods cost/pricing, technology infrastructure, and information policy in the era of knowledge economy. Due to the unique cost structure and product characteristics of information goods, conventional pricing strategies are unfeasible, and a differential pricing strategy is crucial. Nevertheless, few models exist for pricing information goods in the e-service industry. This study proposes a novel collaborative pricing model in which customers are active participants in determining product prices and adopt prices and services that meet their changing needs. This study also shows that the collaborative pricing model generates an optimal bundle price at equilibrium with optimal profit and utility. Theoretical proofs and practical implications justify this pricing model, which is essential for future information goods pricing in the information economy.

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