Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good

29 Pages Posted: 30 Aug 2005

See all articles by Henry W. Chappell

Henry W. Chappell

American University of Sharjah - Department of Economics

Paulo Guimaraes

University of South Carolina - Darla Moore School of Business; IZA Institute of Labor Economics

Orgul D. Ozturk

University of South Carolina - Moore School of Business - Department of Economics

Date Written: July 25, 2005

Abstract

We investigate profit-maximizing versioning plans for an information goods monopolist. The analysis employs data obtained from a web-based field experiment in which potential buyers were offered information goods in varied price-quality configurations. Maximum simulated likelihood (MSL) methods are used to estimate parameters describing the distribution of utility function parameters across potential buyers of the good. The resulting estimates are used to examine the impact of versioning on seller profits and market efficiency.

Keywords: Versioning, price discrimination, field experiment, maximum simulated likelihood

JEL Classification: C81, C93, D12, D42, D83

Suggested Citation

Chappell, Henry W. and Guimaraes, Paulo and Ozturk, Orgul D., Confessions of an Internet Monopolist: Demand Estimation for a Versioned Information Good (July 25, 2005). Available at SSRN: https://ssrn.com/abstract=788104 or http://dx.doi.org/10.2139/ssrn.788104

Henry W. Chappell (Contact Author)

American University of Sharjah - Department of Economics ( email )

PO Box 26666
Sharjah
United Arab Emirates

Paulo Guimaraes

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Orgul D. Ozturk

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States

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