An e-product can be digitally
encoded then transmitted
rapidly, accurately and cheaply.
An experience good or
service must be sampled
before the user knows its value.
Information overload arises
when the volume of available
information is large but the cost
of processing it is high.
Screening devices are then very
valuable.
Switching costs arise when
existing costs are sunk.
Changing supplier then incurs
extra costs.
A network externality arises
when an additional network
member conveys benefits to
those already on the network.
A two-part tariff levies an
annual charge to cover fixed
costs, and a small price per unit
related to marginal cost.
Versioning is the deliberate
creation of different qualities to
facilitate price discrimination.
Bundling is the joint supply of
more than one product to
reduce the need for price discrimination.
A strategic alliance is a blend
of co-operation and
competition in which a group of
suppliers provides a range of
products that partly
complement one another.
A standard is the technical
specification that is common
throughout a particular network.
An asset price bubble is a
departure of the price from that
justified by fundamental
characteristics of the asset.
Bubbles are self-fulfilling
prophecies.
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