This article examines how performance-contingent pricing schemes with long-term statistical performance guarantees can be applied to many IT services. We study two forms of performance-contingent pricing, with rebate proportional to failure rate and fixed rebate for below-threshold performance....

This paper provides insights about when versioning is an optimal strategy for information goods. Our characterization of this class of goods is that variable costs are invariant with quality, including the special case of zero variable costs. Our analysis assumes a monopoly firm that has an...

This paper studies product bundling in a distribution channel where a downstream retailer combines component goods produced by separate manufacturers acting independently. Past literature offers deep insights about bundling by a single firm whose unit costs are not impacted by choice of selling...

Firms that serve a large market with many diverse consumer types use discriminatory or nonlinear pricing to extract higher revenue, inducing consumers to separate by self-selecting from a large number of tariff options. But the extent of price discrimination must often be tempered by the high...

Peer-to-peer (P2P) services allow users to share networked resources, notably bandwidth and content, from the edges of the network. These services have been popularized because of file sharing - particularly the sharing of unlicensed copyrighted files. However, content owners are increasingly...

Online grocers accept delivery bookings and have to deliver groceries to consumers' residences. Grocery stores operate on very thin margins. Therefore, a critical question that an online grocery store needs to address is the cost of home delivery operations. In this paper, we develop a Markov...

The merger of distributed object technology, agent systems and electronic commerce enables a new generation of useful information services. With the advent of interoperable information services, markets featuring software agents as information service/product providers can be created. Meta...

Using data collected between August 1999 and January 2000 covering 399 books, including New York Times bestsellers, computer bestsellers, and random books, we examine pricing by thirty-two online bookstores. One common prediction is that the reduction in search costs on the Internet relative to...