Nonlinear Pricing of Information Goods

Article, Preprint OPEN
Arun Sundararajan (2004)
  • Journal: Management Science, volume 50, issue 12 December, pages 1,660-1,673
  • Related identifiers: doi: 10.1287/mnsc.1040.0291
  • Subject: pricing, price discrimination, information goods, digital goods, adverse selection, screening, principal agent, incentives, mechanical design, incentive compatible, monopoly, incomplete information, second-degree price discrimination, two-part tariff, vertical differentiation, software, Internet | nonlinear pricing, screening, digital goods, information goods, fixed-fee, usage-based pricing, transaction costs
    • jel: jel:D42 | jel:D82 | jel:L12

This paper analyzes optimal pricing for information goods under incomplete information, when both unlimited-usage (fixed-fee) pricing and usage-based pricing are feasible, and administering usage-based pricing may involve transaction costs. It is shown that offering fix... View more
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