We present a framework for measuring software quality using pricing anddemand data, and empirical estimates that quantify the extent of qualitydegradation associated with software ver- sioning. Using a 7-month,108-product panel of software sales from Amazon.com, we document theextent to which...

We develop and analyze a model of pricing for digital products withdiscontinuous supply functions. This characterizes a number ofinformation technology-based products and services for which variableincreases in demand are fulfilled by the addition of 'blocks' ofcomputing or network...

A series of recent papers have investigated the nature of trading andsorting induced by the dynamic price mechanism in a competitive durablegood market with adverse selection and exogenous entry of traders overtime. These models are dynamic versions of Akerlof's (1970) seminalwork. The general...

It is well known that the Internet has significantly reduced consumers'search costs online. But relatively little is known about how searchcosts affect consumer demand structure in online markets. In this paper,we identify the impact of search costs on firm competition and marketstructure by...

The phenomenon of sponsored search advertising – where advertiserspay a fee to Internet search engines to be displayed alongside organic(non-sponsored) web search results – is gaining ground as thelargest source of revenues for search engines. Using a unique paneldataset of several hundred...