How to Sell an App: Simple Pricing Schemes for Consumers With Evolving Values
Abstract
We consider a pricing problem where a buyer is interested in purchasing/using a good, such as an app or music or software, repeatedly over time. The consumer discovers their value for the good only as they use it, and the value evolves with each use as a martingale. We provide a simple pricing scheme and show that its revenue is a constant fraction of the buyer's expected cumulative value.
Bio
Balu Sivan is a research scientist at Google Research in New York. His research interests are in algorithmic game theory, auction/mechanism design, online algorithms and online learning. Prior to this he was a postdoctoral researcher at Microsoft Research in Redmond. He obtained his PhD in Computer Science from the University of Wisconsin-Madison in 2013 and his undergraduate degree in Computer Science from the Indian Institute of Technology Madras in 2008. He is a recipient of the 2013 ACM SIGecom Doctoral Dissertation Award.
