Effects of pricing on Internet user behavior

Authors:
Jörn Altmann;Björn Rupp;Pravin Varaiya
Affiliations:
Department of Electrical Engineering & Computer Sciences, University of California at Berkeley, Berkeley, CA 94720, USA E-mail: altmann@eecs.berkeley.edu;Department of Economics, Institute of Information Systems, Humboldt University Berlin, Berlin, Germany E-mail: brupp@wiwi.hu-berlin.de;Department of Electrical Engineering & Computer Sciences, University of California at Berkeley, Berkeley, CA 94720, USA E-mail: varaiya@eecs.berkeley.edu
Venue:
Netnomics
Year:
2001

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Abstract

The INternet Demand EXperiment (INDEX) conducts experiments to measure demand for quality-differentiated Internet access as a function of bandwidth, traffic volume, applications, and pricing structure. This paper presents an overview of results based on aggregated data from five pricing experiments. In these experiments, pricing is based either on time, volume, a combination of both, or a flat-rate buy out option. Quality of Service (QoS) is differentiated by varying bandwidth for incoming and outgoing traffic. After describing the experimental design and characterizing our subject pool using demographic data, we examine the change in service usage by comparing the five experiments in terms of traffic generation, QoS selection, and expenditure.