Signaling and Segmentation on Electronic Markets: Innovative Pricing Strategies for Improved Resource Allocation

The advent of the digital economy and the increasingly important role of various kinds of electronic market places provide unprecedented opportunity for suppliers of products and services to experiment with new pricing mechanisms and strategies. Economic appropriateness, technical feasibility, and purposes of such pricing mechanisms depend mainly on product characteristics and the role of intermediaries. In order to allow for advanced, efficient pricing strategies and fast price adjustments on the Web, technologically supported infrastructures and systems are crucial. New information technologies not only enable businesses to charge personalized prices on the Internet, but also allow for new price setting mechanisms in which the consumer specify their interests and requirements. This paper provides some conceptual background for developing net-based pricing strategies and reflects first empirical evidences against it.