Pricing Mechanisms for Knowledge Market Online: A Model-Based Analysis

Pricing Mechanisms for Knowledge Market Online: A Model-Based Analysis

Zuopeng Zhang (State University of New York, USA) and Sajjad M. Jasimuddin (Kedge Business School, France)
DOI: 10.4018/978-1-4666-9787-4.ch070
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Introduction

Recently, Internet technologies have transformed the traditional landscape of business models and consumers’ shopping behaviors. The use of technology in supporting knowledge management facilitates knowledge sharing activities and opens new capabilities in business processes (Islam, Jasimuddin, & Hasan, 2015; Jasimuddin & Zhang 2011). The population of customers who prefer shopping online is growing as they view online shopping as a convenient option that can save time and transportation cost. In addition, the proliferation of electronic intermediaries provides customers additional benefits such as consumer reviews, product (or service) comparison, and best price search.

Against the backdrop of the latest development in electronic business, recent years have also witnessed the steady growth of online knowledge markets where knowledge is treated as commodities. Potential buyers and sellers can meet in such a market to transact knowledge electronically.

Knowledge is widely regarded as a crucial component for enhancing the competitive advantage in business (Jasimuddin & Zhang, 2014; Jasimuddin, Connell & Klein, 2012; Jasimuddin & Zhang, 2009; Jasimuddin, Connell, & Klein, 2006). Various types of online knowledge markets specializing in assorted domains of knowledge and pricing mechanisms start to emerge in the economy. For example, Intota Expert Knowledge Services (www.uclue.com) follows the prior business model of Google Answers. In contrast to the traditional transactions of physical goods, buyers set their prices for the “goods” (the knowledge) that they want to purchase, and sellers (knowledge experts) choose available offers from buyers to make transactions. At Uclue, customers post their questions and set a price, for example, between $10 and $400. Experts hired by Uclue browse all the posted questions and decide whether or not to answer the questions based on their own valuations. A question can only be answered by one expert, and once the answer is complete, 75% of the price for the question will go to the expert and the other 25% will remain with Uclue for its maintenance fee.

Key Terms in this Chapter

Mainstream Knowledge Consumer: Those who utilize the knowledge market to acquire knowledge to derive additional utilities.

Maximal Posting Price: The highest price that a knowledge buyer is allowed to pay to a knowledge seller to get his(her) question answered.

Spin-off Information Consumer: Those who are only interested in using the knowledge market as an alternative to finding information without value added to their utilities.

Knowledge Seller: People who are experts in certain areas and can answers questions and obtain payments on an online knowledge market.

Online Knowledge Market: An online platform where knowledge buyers meet sellers to make transactions on knowledge.

Knowledge Buyer: People who seek and are willing to pay for the answers to their questions on an online knowledge market.

Minimal Posting Price: The lowest price that a knowledge buyer should pay to a knowledge seller to get his(her) question answered.

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