Pricing Strategies in Information Goods in Data Supply Chain

By focusing on new features of data products and, based on game theoretical models, we study three pricing mechanisms’ performance and their effects on the participants in the data industry from the data supply chain perspective. A win-win pricing strategy for the players in the data supply chain is proposed. We obtain analytical solutions in each pricing mechanism, including the decentralized and centralized pricing, Nash Bargaining pricing, and revenue sharing mechanism. Our findings show that: (1) the decentralized pricing has the lowest performance; (2) although Nash Bargaining pricing can achieve the centralized channel performance, the upstream data provider and downstream application provider can only equally divide the total channel profit; (3) revenue sharing mechanism, in which the data provider subsidizes the application provider, can achieve the first best performance and divide the maximum profit arbitrarily. Accordingly, end-users benefit mostly from the bargaining pricing and revenue sharing.