Versioning in the information economy: Theory and applications
(2005) CES-IFO Economic Studies — Vol. 51, n° 2-3, p. 329-358 (2005)
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- Abstract
- Price discrimination consists in selling the same product to different buyers at different prices. When sellers cannot relate a buyer's willingness to pay to some observable characteristics, price discrimination can be achieved by targeting a specific package (i.e., a selling contract that includes various clauses in addition to price) for each class of buyers. The seller faces then the problem of designing the menu of packages in such a way that each consumer indeed chooses the package targeted for her. This practice, known as versioning (or as second-degree price discrimination), is widespread in the information economy. In this paper, we propose a simple unified framework to study the general theory behind versioning and to consider a number of specific versioning strategies used in the information economy (namely, bundling, functional degradation and conditioning prices on purchase history)
- Affiliations
Louvain School of Management CESAM - Center for Studies in Asset Management
Citations
Belleflamme, P. (2005). Versioning in the information economy: Theory and applications. CES-IFO Economic Studies, 51(2-3), 329-358. https://doi.org/10.1093/cesifo/51.2-3.329 (Original work published 2005)