we talked exclusively about data pricing. Where we, we saw how its originally
flat-rate pricing, and, with some of the, problems with that, and what made us
recently switch to usage-based pricing, to more properly landing sentence right
we. The ISPs couldn't really deal with those
excessive demands anymore. They came about with our Smartphones and
the ease at which we can access data, right.
And we even argue that the primary use of phones now maybe even switched to data
over voice and that's a possibility. we talked about the pros and the cons of
different methods, so we focused mostly on comparing usage base of flat rate and
showing how usage base is more efficient in many instances, but we've looked at
others as well. then we talked about economics and that
was a huge part of our analysis in comparing usage based to flat rate
pricing. we talked about utility and what utility
means is really users' happiness for a given quantity of their consuming of a
product. Alright, the utility is never going to
decrease, because whenever you get more of something, it's always a positive
thing, no matter how small, it may help. and the utility could be constant as you
go from one point to another. it could, but it's just, it's never going
to decrease, usually always going to increase.
the demand. We talk about the demand, which has the
opposite trend. That's looking at how the quantity they
will consume will change as the price, which is set by the network, is going to
change. Alright, so a higher price is going to
induce a lower demand. the demand will never increase.
It could, it could potentially the demand will never increase with a higher price.
There's a potential that it could stay the same.
Right? For instance, if you're putting gas in
your car, for instance. Something that's really, really
important. Even if someone charged you a little
more, you might still buy the same amount.
And then we also talked about a graphical interpretation of utility demand.
And that it's really important when comparing flat rate usage based pricing.
And understanding. Really, what this graph means here,
alright, so when we set our given price, what demand that induces, so if the price
is some amount per gigabyte, then that will tell us how many gigabytes we're
going to assume, based upon whoever the demand curve is, and
So it's really important to understand what these, what the implications are of
these graphs and how to read them. Then some major themes that we saw here.
first the idea of the negative externality.
Right so negative externality here in this case.
We saw it back in chapter one with interference.
But here it's in terms of any congestion through networks.
So every device, by being in the network, is going to come and pose some congestion
because they're drawing data from the network.