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Dynamic pricing for technology upgrades in telecommunication industry

Published: 15 August 2005 Publication History

Abstract

In telecommunication industry, as a superior, but compatible, technology replaces old technology, consumers gradually abandon old service/device and adopt new counterpart that has more features and better performance. This process usually generates multiple externalities within the new technology adopters as well as the old technology users. While the increase in subscription of the new service encourages more consumers to join in, the decline in performance due to increasing network load deters the adoption process. In the mean while, the diminishing population of the old technology users alleviates the congestion of the old network, hence further discourages the growth of the new services. These concurrent externalities ultimately determine the market growth dynamics. We consider the case that the new service is downward compatible and model the new service adoption process with the two-side externalities. We also propose optimal pricing strategies such that the profit of the service provider is maximized for given other constraints. The results enable decision-makers to determine the optimal marketing strategies in many practical uses such as the deployment of Third Generation (3G) networks and upgrades of networking infrastructures.

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  • (2012)Pricing strategies for user-provided connectivity services2012 Proceedings IEEE INFOCOM10.1109/INFCOM.2012.6195696(2766-2770)Online publication date: Mar-2012

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cover image ACM Other conferences
ICEC '05: Proceedings of the 7th international conference on Electronic commerce
August 2005
957 pages
ISBN:1595931120
DOI:10.1145/1089551
  • Conference Chairs:
  • Qi Li,
  • Ting-Peng Liang
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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Association for Computing Machinery

New York, NY, United States

Publication History

Published: 15 August 2005

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  1. dynamic pricing
  2. multiple externalities
  3. telecommunication

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  • (2012)Pricing strategies for user-provided connectivity services2012 Proceedings IEEE INFOCOM10.1109/INFCOM.2012.6195696(2766-2770)Online publication date: Mar-2012

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