Market design in emarketplaces: Pricing of information goods and services

This dissertation focuses on assisting information good/service providers on how to optimally sell and price their products using both nonlinear mixed integer programming and economics modeling techniques. There are three related essays in this dissertation. In the first essay, we investigate a bundle strategy for the information goods, called customized bundle and examine how many and what bundle sizes should be offered and as at what prices. In the second essay, we compare three pricing schemes and study the optimal pricing scheme for the information service provider. In the third essay, we consider information goods pricing under the threat of piracy and show that versioning could be an effective and profitable instrument to fight piracy for the digital information goods. By studying these issues, we hope to help guide firm's investment decision and assist them in developing appropriate product and service design and pricing strategies in electronic markets. We also hope to contribute new insights and analytical techniques to extend the existing IT literature.