About: Digital goods auction     Goto   Sponge   NotDistinct   Permalink

An Entity of Type : owl:Thing, within Data Space : dbpedia.demo.openlinksw.com associated with source document(s)
QRcode icon
http://dbpedia.demo.openlinksw.com/describe/?url=http%3A%2F%2Fdbpedia.org%2Fresource%2FDigital_goods_auction&invfp=IFP_OFF&sas=SAME_AS_OFF

In auction theory, a digital goods auction is an auction in which a seller has an unlimited supply of a certain item. A typical example is when a company sells a digital good, such as a movie. The company can create an unlimited number of copies of that movie in a negligible cost. The company's goal is to maximize its profit; to do this, it has to find the optimal price: if the price is too high, only few people will buy the item; if the price is too low, many people will buy but the total revenue will be low. The optimal price of the movie depends on the valuations of the potential consumers - how much each consumer is willing to pay to buy a movie.

AttributesValues
rdfs:label
  • Digital goods auction (en)
rdfs:comment
  • In auction theory, a digital goods auction is an auction in which a seller has an unlimited supply of a certain item. A typical example is when a company sells a digital good, such as a movie. The company can create an unlimited number of copies of that movie in a negligible cost. The company's goal is to maximize its profit; to do this, it has to find the optimal price: if the price is too high, only few people will buy the item; if the price is too low, many people will buy but the total revenue will be low. The optimal price of the movie depends on the valuations of the potential consumers - how much each consumer is willing to pay to buy a movie. (en)
dcterms:subject
Wikipage page ID
Wikipage revision ID
Link from a Wikipage to another Wikipage
sameAs
dbp:wikiPageUsesTemplate
has abstract
  • In auction theory, a digital goods auction is an auction in which a seller has an unlimited supply of a certain item. A typical example is when a company sells a digital good, such as a movie. The company can create an unlimited number of copies of that movie in a negligible cost. The company's goal is to maximize its profit; to do this, it has to find the optimal price: if the price is too high, only few people will buy the item; if the price is too low, many people will buy but the total revenue will be low. The optimal price of the movie depends on the valuations of the potential consumers - how much each consumer is willing to pay to buy a movie. If the valuations of all potential consumers are known, then the company faces a simple optimization problem - selecting the price that maximizes the profit. For concreteness, suppose there is a set of consumers and that they are ordered by their valuation, so that the consumer with the highest valuation (willing to pay the largest price for the movie) is called "1", the next-highest is called "2", etc. The valuation of consumer is denoted by , such that . For every , if the price is set to , then only the first consumers buy the movie, so the profit of the company is . It is clear that in this case, the company is best-off setting the price at exactly ; in this case its profit is . Hence, the company's optimization problem is: The problem is that, usually, the valuations of the consumers are NOT known. The company can try to ask them, but then they will have an incentive to report lower valuations in order to decrease the price. There is a lot of research on designing strategyproof digital goods auctions. Most of them are based on one of two approaches: * Random-sampling mechanisms, * Consensus estimates. More details and references can be found there. (en)
prov:wasDerivedFrom
page length (characters) of wiki page
foaf:isPrimaryTopicOf
is Link from a Wikipage to another Wikipage of
is foaf:primaryTopic of
Faceted Search & Find service v1.17_git139 as of Feb 29 2024


Alternative Linked Data Documents: ODE     Content Formats:   [cxml] [csv]     RDF   [text] [turtle] [ld+json] [rdf+json] [rdf+xml]     ODATA   [atom+xml] [odata+json]     Microdata   [microdata+json] [html]    About   
This material is Open Knowledge   W3C Semantic Web Technology [RDF Data] Valid XHTML + RDFa
OpenLink Virtuoso version 08.03.3330 as of Mar 19 2024, on Linux (x86_64-generic-linux-glibc212), Single-Server Edition (378 GB total memory, 67 GB memory in use)
Data on this page belongs to its respective rights holders.
Virtuoso Faceted Browser Copyright © 2009-2024 OpenLink Software