Unequal Pricing in the Information Economy: Implications for Consumer Welfare
This article presents an economic analysis of information good pricing and consumer welfare, and discusses the implications of price discrimination in the information economy. It argues that network externalities, coupled with information asymmetry, enable a dominant marketer to price unequally, ext...
| Main Author: | |
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| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
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| Fernleihe: | Fernleihe für die Fachinformationsdienste |
| Published: |
Springer Science + Business Media B. V
2005
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| In: |
Journal of business ethics
Year: 2005, Volume: 56, Issue: 4, Pages: 305-315 |
| Further subjects: | B
discriminatory pricing
B Information Asymmetry B Information good B unequal pricing B network externalities B consumer welfare |
| Online Access: |
Presumably Free Access Volltext (JSTOR) Volltext (lizenzpflichtig) |
| Summary: | This article presents an economic analysis of information good pricing and consumer welfare, and discusses the implications of price discrimination in the information economy. It argues that network externalities, coupled with information asymmetry, enable a dominant marketer to price unequally, extracting late adopters’ surplus to compensate for the loss from early adopters. In the short term, the minority early adopters benefit by paying less, but in the long term, the majority late adopters suffer by paying more. Considering that late adopters are likely to be at a disadvantage in resources, this discriminatory pricing amounts to the poor subsidizing the rich. Based on this analysis, implications for consumer welfare are discussed. |
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| ISSN: | 1573-0697 |
| Contains: | Enthalten in: Journal of business ethics
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| Persistent identifiers: | DOI: 10.1007/s10551-004-5262-7 |