Abstract
We study the dynamic pricing decisions for monopolistic network service providers. We assume that the firm follows a two-part pricing scheme, which consists of an ongoing membership fee, and a usage fee for communications within the network. We study the firms’ problems as an optimal control problem and establish the optimal pricing policy. It’s demonstrated that in the two-part tariff pricing strategy, the membership fee always increases over time with the increase in the network size. These results are particularly useful for managers.
Original language | English |
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Pages (from-to) | 84-86 |
Number of pages | 3 |
Journal | Innovative Marketing |
Volume | 5 |
Issue number | 3 |
State | Published - 2009 |
Bibliographical note
Publisher Copyright:© Gila E. Fruchter, 2009.
Keywords
- Network services
- Optimal control
- Optimal pricing
- Two-part tariff