By Carl Shapiro
In info principles, authors Shapiro and Varian demonstrate that many vintage fiscal options promises the perception and realizing essential to achieve the knowledge age. They argue that if managers heavily are looking to improve powerful concepts for competing within the new economic system, they have to comprehend the basic economics of data know-how. even if details takes the shape of software program code or recorded tune, is released in a booklet or journal, or maybe published on an internet site, managers needs to understand how to guage the implications of pricing, maintaining, and making plans new models of knowledge items, providers, and platforms. the 1st e-book to distill the economics of data and networks into functional enterprise innovations, details principles is a consultant to the successful strikes which may support company leaders navigate effectively during the difficult judgements of the data economic system.
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Additional resources for Information Rules: A Strategic Guide to the Network Economy
There are no natural capacity limits for additional copies. These cost characteristics of information goods have significant implications for competitive pricing strategy. The first and most important point is that markets for information Pricing Information will not, and cannot, look like textbook-perfect competitive markets in which there are many suppliers offering similar products, each lacking the ability to influence prices. Such a market structure may be a plausible description of the market for wheat or government bonds, but it has little relevance to information markets.
Different consumers have different values for your product. You can offer different consumers different prices based on their buying habits and other characteristics, as the supermarkets have done. • Use promotions to measure demand. Promotions to estimate price sensitivity are very easy on the Internet, which makes market research a snap. 43 44 I Chapter 2 GROUP PRICING In the previous section we talked about selling directly to individuals at personalized prices. But the prices weren't really perfectly individualized.
Reuters has responded by filtering and sorting its information to add value; West has protected its position by using its copyrighted key number system of legal references. Differentiation strategies such as these are often enabled by the very same new technologies that threatened to dethrone the industry incumbents. Even if differentiation is difficult or limited, incumbent information providers are well placed to adopt a cost leadership position, so long as they are not rigidly wedded to their historical pricing practices.
Information Rules: A Strategic Guide to the Network Economy by Carl Shapiro