Korean Management Science Review (경영과학)

The Korean Operations Research and Management Science Society (한국경영과학회)
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Comparative Study on Internet Pricing : Flat-rate vs. Usage-based

초고속인터넷 요금제 유형에 대한 비교 검토 : 정액제, 종량제

  • 송재도 (동양공업전문대학 경영학부)
  • Published : 2009.03.31
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Abstract

There is a controversy on Internet pricing, flat-rate vs. usage-based. This study gives a comparative analysis between flat-rate and two-part tariff which is realistic alternative of usage-based pricing. In a basic economic model, two-part tariff based on ISP's cost structure satisfies allocative efficiency and relatively expand the number of subscribers. But the characteristics of Internet service like consumers' uncertainty on cost, measurement cost of traffic and network externality induce increase of cost or decrease of marginal utility. The analysis shows that small impact of these can make flat-rate more efficient.

Keywords

References

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