Low-quality Version Research Articles

Experience information goods: “Version-to-upgrade”

In contrast to “search goods” whose true quality can be determined before inspection, we examine information goods that are “experience goods” — goods whose true quality can only be determined through use. We analyze a “version-to-upgrade” strategy where a monopolist generates vertically differentiated versions as bridges that lead consumers to experience the goods so that they can assess their true quality, and then provide upgrades to consumers that initially purchase lower quality versions. Adopting a two-stage model, we find that if consumers have homogeneous expectations about quality before experience, then the version-to-upgrade strategy involves upgrading all the consumers that in the first stage purchased the low quality version. In this way, consumers that upgrade effectively pay a tax for learning. When consumers have heterogeneous expectations about quality before experience, if consumers are pessimistic, then the version-to-upgrade strategy still drives all consumers to upgrade. However, if consumers are optimistic, then, the version-to-upgrade strategy may induce only some of the consumers that initially purchased the low quality version to upgrade. As profits from upgrades increase, the monopolist sets the quality of the low quality version to the lowest quality that can feasibly reveal the true quality, justifying the use of trial or demonstration versions.

Competition in the News Industry: Fighting Aggregators with Versions and Links

We analyze the linking and versioning strategies of a media firm when facing competition from blogs, search engines and news aggregators. First, we show that when the publisher competes against a blog it is less likely to release a “fighting version” if this generates significant spillovers for its rival. Second, we analyze in which situations a publisher will accept to offer part of its contents to a news aggregator in exchange for financial compensation. We explain that an agreement is possible when the aggregator is not overly dependent on the firm’s contents. Finally, we show that when the firm competes against a search engine, its linking and versioning strategies depend on the amount of traffic it receives from its competitor. The firm can use the search engine as its own low quality version and as a mechanism to expand its market since it gives access to many contents.

Optimal versioning and pricing of information products with considering or not common valuation of customers

Since information products are often offered to market in multiple versions to make vertical differentiation, the optimal versioning strategy has become a hot topic in the research community. This paper focuses on the numerical investigation of the properties of optimal versioning under linear utility functions by considering or not the common valuation (or reservation price) of all customers. The bilevel programming model is built for the optimal versioning task of an information product with the monopolist as the leader and all customers as followers, and it is able to formulate the optimal versioning strategy by considering both quality levels and prices of an information product. The utility functions are defined by considering or not the basic willingness to pay shared by all customers with some-degree of homogeneity, and then the optimality of the two-version scheme is evaluated. It is found that the two-version scheme consisting of both the highest-quality version and the lower-quality version is superior to the one-version scheme with only the highest-quality version when there is nonzero common valuation of customers. But the introduction of the interim-quality version will cannibalize market shares of both the highest-quality version and the lowest-quality version in the three-version scheme according to numerical computation results based on the bilevel programming model. The three-version scheme cannot bring more profit to the monopolist than the two-version scheme, or there does not exist an optimal three-version scheme for the versioning strategy with linear utility functions.

Partial encryption and watermarking scheme for audio files with controlled degradation of quality

With the rapid progress in communication and multimedia technology, protection of multimedia assets has become a major concern. Encryption and watermarking are two complementary techniques that are used for safeguarding multimedia data like audio, video and images. These methods serve two different purposes; encryption helps in making the media unintelligible, while watermarking helps in providing copyright information in it. In this paper a combination of both encryption and watermarking is incorporated on audio files with this aim in view. Discrete Wavelet Transformation (DWT) is performed on audio files up to third level which gives rise to a binary tree like structure. The areas for watermark embedding and encryption are selected among the wavelet coefficients in the leaf nodes of the tree. Detailed experimentation is carried out with analysis of SNR values, that leads to the determination of degree of degradation of the audio quality after encryption. Such controlled degradation can be used for safe distribution of audio contents over public networks, whereby only the authorized users can have access to the high quality contents, while other users can only access a lower quality version.

The price of quality in digital information goods: an empirical investigation

The popularity of consumer digital information goods is disrupting incumbent firms’ business models, which must seek new sources of profitability. One critical factor is quality standards of distribution formats. Do higher-quality versions command price premiums, and if so, how large? Conversely, do lower-quality versions exhibit price discounts? How much will consumers with differing musical preferences pay for these different quality standards? This study examines prices of digital music products offered at multiple quality levels, finding that strategies of quality versioning have potential to produce profits by segmenting consumer markets to address differing quality preferences both within and across product genres.

Information visibility using transmission methods

Lossy coding, selective seeing, ignoring visual cues, and perceptual biases are different sources of error into the visual communication. To counteract these tendencies we propose a change of paradigm from transmitting important information first to seeing important information first, for the same quality factor. Here we use the new paradigm to the evaluation of the visual efficiency of image information when it is reconstructed at high and low fidelity using different transmission methods. To this aim, we apply a rational model of computational attention in which a multi-bitrate attention map will provide us with the attention score for each spatial location at high and low quality versions of the image reconstruction. The rational approach of attention does not purport to describe the ways in which the Human Visual System (HVS) actually do behave in making choices among possible locations of interest for allocating attention. Instead we are interested in the aspects of rationality that seem to be present in the decision making of the HVS. From both rate–attention and rate–distortion curves, we conclude which transmission method is the overall winner according to the new paradigm. A dataset of advertisement images is used to compare the visual efficiency of the advertisement when it is transmitted using three different coders without region-dependent quality of encoding. Experimental results show that a potential consumer may see important areas faster using SPIHT (without region-dependent quality of encoding) on a significant number of advertisement images, even though this transmission method should improve its capabilities in terms of important information visibility across bitrates.

Axiomatic approach to computational attention

Here we describe, in terms of a decision problem, any situation in which a computational system will be forced to allocate attention at any time to one spatial location to improve the reconstruction fidelity on a neighborhood of the chosen point. The result is a rational model of computational attention in which a multi-bitrate attention map will provide us with the attention score for each spatial location at high and low quality versions of the image reconstruction. At any time a rational system should choose, even though without any outside knowledge, among alternative spatial locations in such a way as to avoid certain forms of behavioral inconsistency. We compare the performance between a rational approach of computational attention and various models for predicting visual target distinctness, using scenes that represent military vehicles in complex rural backgrounds.

Fixed Quality Layered Audio Based on Scalable Lossless Coding

The paper addresses a bitstream scalable coder based on the MPEG-4 scalable lossless (SLS) coding system where, in contrast to SLS, the bitrate of the enhancement layer is not fixed but instead an attempt is made to create a quality-fixed enhancement layer. With a PCM audio input, the proposed structure is able to produce an audio version with near-transparent quality on top of the existing low-quality version. In particular, the proposed fixed quality enhancing process with checking procedures is able to provide the minimum amount of enhancement for the low-quality version to obtain a near-transparent quality that is almost indistinguishable from the CD quality. In addition, a bitrate estimation model is proposed. The model enables the direct estimation of the enhancing bitrate from two parameters extracted from the encoding process of the low-quality version. Evaluation results indicate that a better defined quality level is guaranteed compared to a fixed bitrate setting and that in the mean a lower (approximately 20%) bitrate is attained. It is also shown that the estimation model proposed is able to accurately predict the necessary enhancing bitrate and at the same time, reduce the complexity by around 17%.

Rule-Based No-Reference Video Quality Evaluation Using Additionally Coded Videos

This contribution presents a no-reference video quality metric, which is based on a set of simple rules that assigns a given video to one of four different content classes. The four content classes distinguish between video sequences which are coded with a very low data rate, which are sensitive to blocking effects, which are sensitive to blurring, and a general model for all other types of video sequences. The appropriate class for a given video sequence is selected based on the evaluation of feature values of an additional low-quality version of the given video, which is generated by encoding. The visual quality for a video sequence is estimated using a set of features, which includes measures for the blockiness, the blurriness, the spatial activity, and a set of additional continuity features. The way these features are combined to compute one overall quality value is determined by the feature class, to which the video has been assigned. We also propose an additional correction step for the visual quality value. The proposed metric is verified in a process, which includes visual quality values originating from subjective quality tests in combination with a cross validation approach. The presented metric significantly outperforms peak-signal-to-noise ratio as a visual quality estimator. The Pearson correlation between the estimated visual quality values and the subjective test results takes on values as high as 0.82.

Research Note—When Is Versioning Optimal for Information Goods?

This paper provides insights about when versioning is an optimal strategy for information goods. Our characterization of this class of goods is that variable costs are invariant with quality, including the special case of zero variable costs. Our analysis assumes a monopoly firm that has an existing product in the market and has an opportunity to segment the market by introducing additional lower-quality versions. We derive a simple decision rule for determining the optimality of versioning based on the solution to a single-product maximization problem. Versioning is optimal when the optimal market share of the lower-quality version, offered alone, is greater than the optimal market share of the high-quality version, offered alone. A firm can profitably employ versioning for an information good if it can design the lower quality in a way that, relative to their valuations for the high-end version, high-type consumers have a lower relative valuation for the lower quality than do low-type consumers. When variable costs increase, a firm that offered only one product version need not consider adding another version. When variable costs decrease, the firm should explore adding a lower-quality version.

On the measurement of product quality in intra-industry trade: An empirical test for China

A relatively recent development in the intra-industry trade (IIT) literature is the measurement of the simultaneous import and export of quality-differentiated products, commonly known as vertical and horizontal IIT. A recent paper from Azhar and Elliott [Azhar, A. K. M. & Elliott, R. J. R. (2006), On the Measurement of Product Quality in Intra-Industry Trade, Review of World Economics, Vol 142 no 3, pp 476–495] analyses various approaches for disentangling vertical and horizontal IIT and suggests a complementary methodology. To investigate the robustness and sensitivity of the existing approaches we examine data on the nature of trade flows between China and its East Asian neighbours and show that in 2002 China tended to export low quality versions of its manufactured goods to Malaysia, Thailand and the Philippines.

Analysis of pricing strategies for e-business companies providing information goods and services

In this paper, we introduce a mathematical model to analyze pricing and service quality strategies for e-business companies providing information services to customers. The basic strategy considered in this paper is that a monopolistic e-business company provides free services to try to earn a profit by developing premium goods or services to market created by their free goods or services. It is a kind of versioning strategy where lower quality versions of information goods are provided free. And a direct network effect was also considered. And we tried to find the profit maximizing strategies for monopolistic e-business companies. As a result, the optimal quality and price for the premium goods or services can be obtained at the same level of the intensity of the direct network effect. And the exact term related with the network externality is derived and insights are demonstrated through numerical explorations.

Content browsing and semantic context viewing through JPEG 2000-based scalable video summary

The paper presents a novel method and software platform for remote and interactive browsing of a summary of long video sequences as well as revealing the semantic links between shots and scenes in their temporal context. The solution is based on interactive navigation in a scalable mega image resulting from a JPEG 2000 coded key-frame-based video summary. Each key-frame could represent an automatically detected shot, event or scene, which is then properly annotated using some semi-automatic tools or learning methods. The presented system is compliant with the new JPEG 2000 Part 9 'JPIP - JPEG 2000 interactivity, API and protocols,' which lends itself to working under varying transmission channel conditions such as GPRS or 3G wireless networks. While keeping the advantages of a single 2D video summary, like the limited storage cost, the flexibility offered by JPEG 2000 allows the application to highlight interactively key-frames corresponding to the desired content first within a low-quality and low-resolution version of the full video summary. It then offers fine grain scalability for a user to navigate and zoom into particular scenes or events represented by the key-frames. This possibility of visualising key-frames of interest and playing back the corresponding video shots within the context of the whole sequence (e.g. an episode of a media file) enables the user to understand the temporal relations between semantically related events/actions/physical settings, providing a new way to present and search for contents in video sequences.

Taxation and Product Quality: New Evidence from Generic Cigarettes

In this Journal, Barzel (1976) theorized that per unit taxes should increase the average quality of a product, whereas ad valorem taxes may either lower product quality or leave it unaffected. There are several different ways to present the logic behind this theory. Barzel stresses that per unit taxes do not tax all attributes of a commodity, causing a substitution from the taxed attributes (quantity) into the others (quality).1 Another way is to draw an analogy to the Alchian and Allen (1964) theorem, where the addition of a fixed fee causes a decrease in the relative price of the higher-quality version of the product.2 Because ad valorem taxes add the same percentage to the prices of both the highand low-quality versions of the product, they do not distort relative prices. Thus ad valorem taxes should

Commodity money under private information

Private information is introduced into the Kiyotaki-Wright model of commodity money in terms of qualitative uncertainty concerning the good which would be the unique medium of exchange under complete information. Producers are allowed to produce high- or low-quality versions of that good, and people may not always recognize its quality. It is shown that commodities that suffer from qualitative uncertainty may still be used as the medium of exchange when the private information problem is not too severe. This is so despite the fact that, in some equilibria, there is necessarily some low-quality commodity money in circulation. When the information problem is so severe that the good of uncertain quality cannot be the unique money, there can exist an equilibrium with dual commodity monies of which one is the good subject to qualitative uncertainty.