Cobb-Douglass Utility Function in Optimizing the Internet Pricing Scheme Model
Abstract: The greater numbers
of internet users the greater challenge will be tackled by ISP to provide good
services but gain maximum profit. By analyzing Cobb-Douglass utility function
we will obtain optimal pricing scheme. Wu and Banker analyzed modified
Cobb-douglass utility function and obtained optimal model of flat fee and two
part tariff for homogen consumers meanwhile we focus on getting optimal pricing
scheme model by using original Cobb-Douglass utility function. The first step
to conduct this research is by formulating Cobb-Douglass utility function then
analyzing that function. The results show that we obtain optimal pricing scheme
model for homogenous and heterogeneous consumer cases. The two-part tariff
pricing scheme yield better optimal solution rather than flat fee and two-part
tariff pricing scheme regarding with homogen consumers and heterogen consumers
based on willingness to pay. For heterogeneous consumers based on consumption
level, the optimal pricing scheme is on two-part tariff pricing scheme.
Author: Indrawati, Irmeilyana,
Fitri Maya Puspita, Meiza Putri Lestari
Journal Code: jptkomputergg140035
