Showing papers by "Hal R. Varian published in 2005"

Conditioning Prices on Purchase History

Abstract: The rapid advance in information technology now makes it feasible for sellers to condition their price offers on consumers' prior purchase behavior. In this paper we examine when it is profitable to engage in this form of price discrimination when consumers can adopt strategies to protect their privacy. Our baseline model involves rational consumers with constant valuations for the goods being sold and a monopoly merchant who can commit to a pricing policy. Applying results from the prior literature, we show that although it is feasible to price so as to distinguish high-value and low-value consumers, the merchant will never find it optimal to do so. We then consider various generalizations of this model, such as allowing the seller to offer enhanced services to previous customers, making the merchant unable to commit to a pricing policy, and allowing competition in the marketplace. In these cases we show that sellers will, in general, find it profitable to condition prices on purchase history.

Copying and Copyright

Abstract: Today most newly created textual, photographic, audio and video content is available in digital form. Even older content that was not “born digital” can relatively easily be converted to machine-readable formats. At the same time, the world has become more networked, making it easy to transfer digital content from one person to another. The combination of technological progress in both digitization and computer networking has been a challenge for traditional ways of managing intellectual property. Some observers have even questioned whether current models for intellectual property can or should survive in a digital world. For example, there is widespread concern about piracy of popular music and film, both via the network and via bootleg CDs and DVDs. There is also concern about the economic viability of the current model for scholarly publication or, for that matter, traditional forms of publishing such as newspapers and TV network news. These developments have led to a revival of interest in the economics of copying and copyright. In this brief review, we examine some of the economic issues in this area and describe some of the insights that have emerged from this work. We end with some reflections on alternative business models for provision of creative works. Readers interested in additional discussion of some of the unique challenges associated with digital media might begin with National Academy of Sciences (2000), Maxwell (2004) and Musick (2004).

Facilitating the serving of ads having different treatments and/or characteristics, such as text ads and image ads

Abstract: The serving of ads of different ad types, such as text ads and image ads, competing to be rendered on an ad area of a document may be arbitrated by (a) determining candidate ads to serve in response to an ad request, wherein the candidate ads include at least one ad of a first ad type and at least one ad of a second ad type, (b) determining a score of each of at least some of the candidate ads, (c) comparing alternative sets of the at least some of the candidates ads to select a set that best meets at least one policy goal, and (d) serving the selected set of candidate ads. Performance parameter values of ads of one type, such as image ads for example, may be estimated from performance parameter values of ads of a second type, such as text ads for example.

Adjusting ad costs using document performance or document collection performance

Abstract: Documents or document sets may be scored to reflect a value of an action, such as a selection for example, when an ad is served with the document (or a document belonging to a document set). A cost associated with the action with respect to an ad that was served with a document may then be adjusted using the score (700 and 800). For example, ad scores may be accepted or determined, and a document may be scored using the ad scores when served with the document and ad scores across a collection of documents to generate a document score. Each of the ad scores may indicate a value of an action with respect to an ad, such as a conversion rate, or a return on investment for an ad selection for example. Document scores used in this way may help advertisers get a more consistent cast per conversion, or return on investment, without requiring them to enter and manage various offers for various documents and/or various ad serving systems having various conversion rates or returns on investment.

The demographics of the do-not-call list [security of data]

Abstract: Data from do-not-call registries and other sources show discernible patterns in the demographics of consumers who signed up for do-not-call lists. Such patterns might also be useful in analyzing the prospects for a do-not-spam registry

Universal access to information

Abstract: In 2003, the world produced about 800MB of information for each man, woman, and child on earth [2]. Much of this information, such as supermarket scanner data and the like, is pretty dull. But some of it, such as the material contained in books, magazines, newspapers, movies, music, and family photos, is potentially of great interest to people.