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Information Disclosure and Pricing Policies for Sales of Network Goods

Ming Hu¹; Zizhuo Wang^2,3; Yinbo Feng⁴

¹ Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada · ² Department of Industrial and Systems Engineering, University of Minnesota, Minneapolis, Minnesota 55455; · ³ Institute for Data and Decision Analytics, Chinese University of Hong Kong, Shenzhen 518172, China; · ⁴ Research Institute for Interdisciplinary Sciences, School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai 200433, China;

Amazon and Apple, which sell tablet devices, have adopted different implicit information policies and developed distinct “reputations” about their tablets’ sales volume release. With Amazon, “even a number as basic, and presumably impressive, as how many Kindle e-readers the company sells is never released.” With Apple, iPhone and iPad sales numbers are always released, even if they are disappointing. In the paper “Information Disclosure and Pricing Policies for Sales of Network Goods,” the authors study the sales information release policy, disclosure versus nondisclosure, for selling network goods subject to market size uncertainty. They identify two countervailing effects, a prodisclosure “Matthew effect” and an antidisclosure saturation effect, that drive the firms’ sales information disclosure policies. In addition, the authors also study the situation where the firm can decide on an all-or-nothing information disclosure policy together with endogenized prices, including state-independent pricing, contingent preannounced pricing, and contingent pricing without commitment.

DOI

10.1287/opre.2019.1950

Volume

68 (4)

Pages

1162-1177

Language

en

Export

BibTeX

Sources

crossref openalex