On pricing strategies of digital information goods with strategic consumers
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    Abstract:

    In practice, Apple iTunes can sell digital music through a secondary market approach, while Amazon Kindle still utilizes dynamic pricing to sell ebook without resale. Compared to dynamic pricing, under what conditions should the platform use a secondary market to sell digital information goods?To solve this problem, two dynamic game models are established to compare the secondary market and dynamic pricing, and some interesting conclusions are as follows: (i) If all consumers are strategic, the optimal markdown pricing strategies will lead to no consumers waiting to buy, which is equivalence to a fixed price. (ii) The optimal price for opening secondary market is not greater than the first period price under dynamic pricing, and secondary markets can increase total consumers’surplus. (iii) Results show that the secondary market outperforms dynamic pricing as long as the wholesale price is larger than a certain threshold value. At last, a numerical experiment is conducted to do sensitivity analysis on the related parameters.

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  • Online: January 20,2025
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