The Willingness to Pay for Information in Digital Marketplaces

Abstract

While information may carry an intrinsic, objective value, this value is not known before consumption; therefore, it is the perception of its value by the user that determines if and how it will be acquired and applied. This pre-consumption perception is followed by post-consumption experience which may shed more light on the evolution of value perception. A financial markets knowledge game connected to an information shop was the research tool in the present study. Results indicate that the perceived value of information changes over the course of actual usage of information, as evidenced by the tendency to supplement the up-front payment with a voluntary tip and also as indicated by the difference between the very first price bid compared to the average bid. While information was shown to have realistic value, this value may have been difficult to perceive in real time during the game, and thus led to subjective purchasing decisions resulting in less-than-optimal game results. Overall, we demonstrated that given the right incentives and circumstances a vibrant information market arises with pricing practices that are suitable for digital goods. This holds promise for the construction of novel online exchanges for digital goods.