Efficient capacity pricing of the internet services

Chang H.O. Yoon, Young Woong Song, Byoung Heon Jun

Research output: Contribution to journalArticlepeer-review


The paper examines the possibilities to improve efficiency in Internet pricing by introducing pre-purchase contract. One can regard pre-purchase market as a device for providing guaranteed services and as an alternative to smart market that can implement expected capacity pricing in an efficient manner. We find that the pre-purchase market tends to discriminate against the consumers who are less certain about their demands. We provide a condition under which the discriminatory effect is overwhelmed by the market force, which discourages the consumers with lower value by high premium. We also suggest a solution to the discriminatory effect.

Original languageEnglish
Pages (from-to)149-158
Number of pages10
JournalHitotsubashi Journal of Economics
Issue number2
Publication statusPublished - 2005 Dec


  • Edge pricing
  • Internet pricing
  • Network congestion
  • Pre-purchase
  • Smart market

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Economics and Econometrics


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