The Future of Economics
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A talk on the future of economics by Scientific Revenue's CEO, William Grosso, at the Wolfram Data Summit.
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The Future of Economics
- 1. bill@scientificrevenue.com Dynamic Pricing for In-App Purchases © 2014. Company Confidential and Not for Redistribution.
- 2. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution. Warning: Scientific Revenue is a Silicon Valley Company
- 3. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 4. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution. (example from existing game, Not an SR customer)
- 5. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 6. bill@scientificrevenue.com Retail Strategies are Starting to Emerge What Bill Sees What Bill’s Wife Sees (example from existing game, Not an SR customer) © 2014. Company Confidential and Not for Redistribution.
- 7. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 8. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 9. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 10. bill@scientificrevenue.com Setting Prices Hospitality and Retail Typical Digital Goods Company © 2014. Company Confidential and Not for Redistribution.
- 11. bill@scientificrevenue.com In the World of Airlines • Non-negotiated pricing • Flexible return policy • Segmentable market demand • Highly competitive markets / little or no vendor loyalty • Generally available ratecards • Pre-existing anchoring on pricing and rates • Infrequent, large-dollar amount purchases • Customers return months or years later • Low variable costs • Fixed capacity • Inventory can be changed from one product to another • Perishable inventory
- 12. bill@scientificrevenue.com In the World of Digital Content • Non-negotiated pricing • Flexible return policy • Segmentable market demand • Highly competitive markets / little or no vendor loyalty • Generally available ratecards • Pre-existing anchoring on pricing and rates • Infrequent, large-dollar amount purchases • Customers return months or years later • Low variable costs • Fixed capacity • Inventory can be changed from one product to another • Perishable inventory “One sided haggling” -- Ability to offer different prices at different times. Market conditions change depending on user engagement. Pricing can be highly personalized and based on deep knowledge of individual consumer Anchoring depends on vertical but is mostly mitigated by virtual currency formulations Large numbers of small transactions occurring close together in time Costs mostly variable Unlimited capacity and inventory Durable inventory
- 13. bill@scientificrevenue.com A Phone or Tablet … • … Is the way in which digital content is consumed • … Is a long-term persistent identifier that can be associated with behavior • … Contains a vast amount of information about the person (which changes over time) • … Is a personalized point-of- sale-device with built in confidentiality and security © 2014. Company Confidential and Not for Redistribution.
- 14. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution. Plus, Behavior Modification Plus, Feedback Systems
- 15. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution. Finally we are in a position to answer that age old question … Which is stronger Intertemporal Price Discrimination or Operant Conditioning
- 16. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution. How would you change your prices if you knew someone was about to leave?
- 17. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 20. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution. Related: If a user hasn’t bought something in the first 8 days, they have only a 2% chance of purchasing
- 22. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution. People who buy earlier, spend more….
- 24. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 25. bill@scientificrevenue.com These Books Have Untested (but Testable) Theories and Hypotheses © 2014. Company Confidential and Not for Redistribution.
- 26. bill@scientificrevenue.com These Books Also Have Untested (but Testable) Theories and Hypotheses © 2014. Company Confidential and Not for Redistribution.
- 27. bill@scientificrevenue.com These Are Not Textbooks © 2014. Company Confidential and Not for Redistribution.
- 28. bill@scientificrevenue.com Grandpa © 2014. Company Confidential and Not for Redistribution.
- 29. bill@scientificrevenue.com We Can Do Science Better © 2014. Company Confidential and Not for Redistribution. N = 224
- 30. bill@scientificrevenue.com Academic Collaborations © 2014. Company Confidential and Not for Redistribution. World class economist looking for game studios interested in exploring the fundamentals of currency design. Topics of interest include: • Coin size and divisibility. • Maximum wallet sizes / inability to carry the money around. • Limiting the total amount of currency in a game (for example, a loyalty currency. You can earn the coins, if they're out there) • Transferability (stealing, gifting, ...) • Universality (spendable everywhere or in select locations? Spendable at all times, or just sometimes)
- 31. bill@scientificrevenue.com© 2014. Company Confidential and Not for Redistribution.
- 32. bill@scientificrevenue.com System Up and Running © 2014. Company Confidential and Not for Redistribution.
- 33. bill@scientificrevenue.com Enormous Amounts of Semantically Rich and Clean Data Puddling Up © 2014. Company Confidential and Not for Redistribution.
- 34. bill@scientificrevenue.com Thank You © 2014. Company Confidential and Not for Redistribution.