a new way to think
RSM455 Pricing
Week 10
Prof. Zachary Zhong
,Agenda
⚫ Introduction
⚫ Session 1: English and second-price auctions
→ MobLab 1, then some theories
⚫ Session 2: Dutch and first-price auctions
→ MobLab 2, then some theories
⚫ Session 3: common value auctions
→ MobLab 3, then some theories
,Roadmap
Roadmap
1. The role of cost, cost-plus
Price 2. Value-based pricing
Demand
• Price elasticity
p
? 3. Multiple prices
4. Pricing for current and fut
profits
5. Competition
• Demand curve move
price changes
6. How to price without kno
demand
MC • Auctions
7. Psychological factors in pr
Quantity: Quantity
D(p)
, Introduction
⚫ Google’s business model:
monetize searches
⚫ Problem: how to price the
advertising slots?
→ Millions of potential keywords
→ For most, you know little about
how much it could be worth
→ There are often multiple buyers,
each has some information on
how much the field is worth
RSM455 Pricing
Week 10
Prof. Zachary Zhong
,Agenda
⚫ Introduction
⚫ Session 1: English and second-price auctions
→ MobLab 1, then some theories
⚫ Session 2: Dutch and first-price auctions
→ MobLab 2, then some theories
⚫ Session 3: common value auctions
→ MobLab 3, then some theories
,Roadmap
Roadmap
1. The role of cost, cost-plus
Price 2. Value-based pricing
Demand
• Price elasticity
p
? 3. Multiple prices
4. Pricing for current and fut
profits
5. Competition
• Demand curve move
price changes
6. How to price without kno
demand
MC • Auctions
7. Psychological factors in pr
Quantity: Quantity
D(p)
, Introduction
⚫ Google’s business model:
monetize searches
⚫ Problem: how to price the
advertising slots?
→ Millions of potential keywords
→ For most, you know little about
how much it could be worth
→ There are often multiple buyers,
each has some information on
how much the field is worth
