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Journal > TELKOMNIKA Telecommunication, Computing, Electronics and Control > Cobb-Douglass Utility Function in Optimizing the Internet Pricing Scheme Model

 

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TELKOMNIKA Telecommunication, Computing, Electronics and Control
Vol 12, No 1: March 2014
Cobb-Douglass Utility Function in Optimizing the Internet Pricing Scheme Model
Indrawati, Indrawati ( Universitas Sriwijaya)
Irmeilyana, Irmeilyana ( Universitas Sriwijaya)
Puspita, Fitri Maya ( Universitas Sriwijaya)
Putri Lestari, Meiza ( Universitas Sriwijaya)
Article Info   ABSTRACT
Published date:
01 Mar 2014
 
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.
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