University of St.Gallen
research platform alexandria
search publications
browse publications
by person
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
 
by year

An Analysis of Usage-Based Pricing Models for Smart Products

Frederic Thiesse & Moritz Köhler

fulltext etc. no fulltext attached
abstract This contribution concerns itself with the potential of Usage-Based Pricing policies for smart products. We develop an analytical model of a supplier of machines and his customer that allows us to compare Usage-Based Pricing to a traditional scheme with fixed prices, and to determine optimal solutions for both parties. Based on these findings, we discuss the value of Usage-Based Pricing on an operational as well as on a strategic level. The main conclusion that can be drawn from our research is that Usage-Based Pricing does not provide any additional value that could not also be achieved by information sharing and joint price optimization. From a more strategic perspective, however, we find that the transfer of demand risk from the customer to the supplier implied by Usage-Based Pricing might be used as a strategic tool to attract new prospects and to enter new markets, but only to a lesser extent as a means to keep existing customers.
   
type journal paper
   
keywords Pricing, Sensor Technology, Ubiquitous Computing, Smart Products, Revenue Management, Yield Management
   
project M-Lab
language English
kind of paper journal article
date of appearance 1-6-2008
journal Electronic Markets
publisher Springer
volume of journal 18
number of issue 3
page(s) 232-241
review double-blind review
   
citation Thiesse, F., & Köhler, M. (2008). An Analysis of Usage-Based Pricing Models for Smart Products. Electronic Markets, 18(3), 232-241.