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http://hdl.handle.net/10397/94097
Title: | Sponsored Data : Smarter Data Pricing with Incomplete Information | Authors: | Mei, X Cheng, HK Bandyopadhyay, S Qiu, L Wei, L |
Issue Date: | Mar-2022 | Source: | Information Systems Research, Mar. 2022, v. 33, no. 1, p. 362-382 | Abstract: | With the upcoming next-generation 5G networks, mobile network operators (MNOs, such as AT&T, T-Mobile, and Verizon) are investigating new business models that encourage content providers (such as Netflix and Spotify) to sponsor data for consumers. Sponsored data allow customers to browse, stream, and enjoy content from their data sponsors without impacting their monthly data plan allowance. We analyze this recent phenomenon using an incomplete information game-theoretical model, where the MNO does not observe consumers’ types (personal valuation of mobile data) and provides multiple data plans to consumers. We find that the impact of sponsored data on consumer surplus crucially depends on whether the MNO has complete information over consumer types: Under complete information, sponsored data do not improve consumer surplus. However, under incomplete information, sponsored data increase consumer surplus. Our analysis also shows that under incomplete information, the MNO should allow sponsored data in a wider range of market conditions than those under complete information. Our study suggests that prior literature tends to underestimate both the long-run detrimental effect of sponsored data on content diversity and the short-run beneficial effect on consumer surplus. Our findings offer important managerial implications for the MNO, who is interested in optimizing the data plans, and for policymakers who regulate the wireless internet market. | Keywords: | Sponsored data Wireless internet Game theory Incomplete information Consumer surplus |
Publisher: | Institute for Operations Research and the Management Sciences | Journal: | Information systems research | ISSN: | 1047-7047 | EISSN: | 1526-5536 | DOI: | 10.1287/isre.2021.1063 | Rights: | © 2021 INFORMS The following publication Mei, X., Cheng, H. K., Bandyopadhyay, S., Qiu, L., & Wei, L. (2022). Sponsored Data: Smarter Data Pricing with Incomplete Information. Information Systems Research, 33(1), 362-382 is available at https://dx.doi.org/10.1287/isre.2021.1063. |
Appears in Collections: | Journal/Magazine Article |
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Mei_Sponsored_Data_Pricing.pdf | Pre-Published version | 2.09 MB | Adobe PDF | View/Open |
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