Confessions of an internet monopolist: Demand estimation for a versioned information good

• Type: Article in International Scientific Journal
• Date: 2011

Authors

Chappell, HW (Author) Other; Paulo Guimaraes (Author) FEP; Demet Ozturk, O (Author) Other

Journal

Title: Managerial and Decision Economics

Vol. 32

Pages: 1-15

ISSN: 0143-6570

Publisher: Wiley-Blackwell

Indexing

Scopus - 0 Citations

Other information

Authenticus ID: P-008-NDJ

DOI: 10.1002/mde.1513

Abstract (EN): We develop and apply a method for estimating demand system parameters for versioned information goods. Our analysis uses data collected from a web-based field experiment in which prices and versions of an information good were exogenously varied. Using a maximum simulated likelihood (MSL) procedure, we estimate parameters characterizing distributions of utility functions over a population of potential buyers. We then construct profit-maximizing versioning and pricing plans for the seller and assess the welfare implications of those plans. Because firms increasingly have opportunities to collect information by tracking behavior of customers, methods similar to ours could be useful in future commercial applications. Copyright © 2010 John Wiley & Sons, Ltd.

Language: English

Type (Professor's evaluation): Scientific