Dynamic pricing strategy for subscription-based information goods
In this article, we study an IT company that rolls out a new information product to individual customers with a certain expected length of life cycle. The company needs to dynamically price the product at each stage in order to maximize its revenue. We analyze its pricing strategy, considering the renewal rate is either constant or updated during each period. The effects of important parameters on total revenue and corresponding managerial insights are also presented with numerical illustrations.
Keywordsinformation goods subscription-based pricing dynamic programming renewal rate
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