An enhanced network service pricing model considering network externalities

Abstract

In this paper, we provide an evaluation model for marketable quality and profitability. We define the marketable quality as a qualitative aspect of profitability. Not always there is a clear tradeoff relation between marketable quality and profitability. Therefore, it is important to discover how to increase the profitability by enhancing marketable quality. We apply the real values of some leading manufacturing Japanese corporations to our proposed model to analyze its accuracy. From the analysis, we found that theoretical and real standard values of the marketable quality indicator were both 0.6. This shows that the proposed model has a good approximation. From the fair relation of network service providers and consumers, we present the network pricing guidelines for the maximum profitability, while enhancing the marketable quality. Also, we enhance our proposed network service pricing model considering network externalities.