The Competitive Effects of Variance-based Pricing
Authors: Ludwig Dierks, Sven Seuken
IJCAI 2020 | Conference PDF | Archive PDF | Plain Text | LLM Run Details
| Reproducibility Variable | Result | LLM Response |
|---|---|---|
| Research Type | Theoretical | In this paper, we study a variance-based pricing rule in a two-provider market setting and perform a game-theoretic analysis of the resulting competitive effects. We show that an innovative provider who employs variance-based pricing can choose a pricing strategy that guarantees himself a higher profit than using fixed per-unit prices for any individually rational response of a provider playing a fixed pricing strategy. We then characterize all equilibria for the setting where both providers use variance-based pricing strategies. We show that, in equilibrium, the providers profits may increase or decrease, depending on their cost functions. However, social welfare always weakly increases. |
| Researcher Affiliation | Academia | Ludwig Dierks and Sven Seuken Department of Informatics, University Zurich dierks@ifi.uzh.ch, seuken@ifi.uzh.ch |
| Pseudocode | No | The paper does not contain any structured pseudocode or algorithm blocks. |
| Open Source Code | No | The paper does not contain any statement about releasing source code or a link to a code repository. |
| Open Datasets | No | The paper uses a theoretical model with a continuous random variable for user types, a probability density function f(t) and cumulative distribution function F(t), and specific cost functions for its numerical example. This is a theoretical construct, not a publicly available dataset. |
| Dataset Splits | No | The paper does not use real-world datasets or simulations that require training, validation, and test splits. |
| Hardware Specification | No | The paper does not provide any specific details about the hardware used for its analysis or numerical examples. |
| Software Dependencies | No | The paper does not mention any specific software or programming libraries with version numbers used for its analysis. |
| Experiment Setup | No | The paper presents a theoretical game-theoretic analysis and a numerical example with defined functions, but it does not include details about an experimental setup, hyperparameters, or training configurations for a software system. |