Pricing strategies for information goods

Digital or information goods are becoming the norm across a wide variety of industries including books, music, entertainment, gaming and education. Due to the fact that the marginal cost of producing or reproducing information goods is very low, it is much easier to customise and personalise them for individual users. Furthermore, sellers of these information goods are increasingly using bundling and versioning strategies to appropriate a greater share of the surplus. This paper examines recent research on pricing of information goods with particular focus on customisation, bundling and versioning strategies adopted by information goods providers. The paper highlights both game-theoretic as well as optimisation models that not only provide different perspectives, but also examine issues of information goods pricing at different levels of abstraction and complexity.