Performance measurement of Transaction Based Pricing Strategies for Innovative Services

• Applicant: Professor Christian Schlereth, Ph.D.
• Subject Area: Accounting and Finance
• Term: from 2010 to 2012
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 192567445

Due to the digitalization of the world and the emergence of internet based services, transaction based pricing e.g., multi part tariffs has gained increasing importance for many services. One of the most challenging tasks for service providers is to select an appropriate tariff structure and to set the right transaction based prices, which must be carefully aligned to the heterogeneous demand and willingness-to-pay of consumers. Current research on transaction based pricing focuses on analytical models to demonstrate the fundamental economic principles without the consideration of the actual usage behavior of customers. To date, only scarce research exists, which measures empirically the usage under common tariff structures (e.g., two- or three-part tariffs), such that many open research questions remain.Yet, more diverse forms of tariff structures as the studied two- or three-part tariffs are used especially for internet based services or in the field of energy consumption. Prominent examples are fair-use flat rates for mobile internet access or critical peak pricing for energy consumption measured with new information technologies like smart meters. These tariff structures make use of new information technologies to provide transparency about consumers usage and to allow them to better control their usage pat-terns. To what extend is unknown, however. This research project is aiming to assess empirically the success of specific transaction based pricing strategies and how they affect customers usage. It is aligned at the intersection between the two research domains information systems and marketing and develops well-founded methods for the evaluation of the quantitative monetary success of different strategies, which make use of these new technologies. It therefore implements new software technologies and applies them empirically.

• DFG Programme: Research Fellowships
• International Connection: Australia
• Host: Professor Dr. Jordan Louviere