Title :
An Economic Model for Pricing Digital Products
Abstract :
An economic model is created that emphasizes the characteristics of digital products. By focusing on price instead of quantity, the model examines the impact of low marginal costs and advertising revenue. The conditions for producing negative prices are explored along with the limitations of assuming linear demand curves in an e-commerce setting. The model explains observed phenomenon in Web examples including digital music, search engine competition, and social networks.
Keywords :
advertising; electronic commerce; pricing; advertising revenue; digital product pricing; e-commerce; economic model; linear demand curves; low marginal costs; Advertising; Costs; Lead; Mathematical model; Monopoly; Power generation economics; Pricing; Production; Search engines; Social network services;
Conference_Titel :
System Sciences, 2009. HICSS '09. 42nd Hawaii International Conference on
Conference_Location :
Big Island, HI
Print_ISBN :
978-0-7695-3450-3
DOI :
10.1109/HICSS.2009.60
