|
Article
| Journal of Economic Perspectives
|
summer 2009
Priced and Unpriced Online Markets
by
Benjamin G. Edelman
|
Abstract
With forces both supporting and opposing zero prices, typical Internet-related activities—like surfing the web, web searches, and e-mail, along with behind-the-scenes practices like domain names and the allocation of IP (Internet Protocol) addresses—present a natural context to reevaluate our sense of the tradeoffs that arise between free and a positive price. In this piece, I offer a series of specific examples of resources offered without charge, for a positive price, or for a flat fee ("all-you-can-eat"). I conclude by assessing the characteristics that shape pricing structure for these resources.
Keywords: Cost vs Benefits;
Price;
Market Transactions;
Service Operations;
Internet;