Inhalt des Dokuments
Pricing Strategies in a Dynamic Network Market: an Experimental Analysis
Description: We study experimentally the conditions that lead to the adoption of network goods in a dynamic setting. The creation of a market for a network good is a coordination game with multiple equilibria. Previous experimental studies on coordination games have mostly concentrated on symmetric simultaneous-move games. We contribute to this research by introducing payoff heterogeneity and sequential decisions.
The experiments concentrate on the role of pricing schemes, in which prices may depend on time (e.g. increasing or decreasing over time, time-limited special offers) and market size (sales-contingent prices). Testing various pricing schemes allows designing mechanisms for implementing the efficient equilibrium and addresses the conditions under which subsidies are required to achieve efficiency.