A talk on the future of economics by Scientific Revenue's CEO, William Grosso, at the Wolfram Data Summit.

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Dynamic Pricing for In-App Purchases
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Warning: Scientific Revenue is a Silicon Valley Company

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(example from existing game, Not an SR customer)

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Retail Strategies are Starting to Emerge
What Bill Sees What Bill’s Wife Sees
(example from existing game, Not an SR customer)
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Setting Prices
Hospitality and Retail Typical Digital Goods Company
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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

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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

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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
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Plus, Behavior Modification
Plus, Feedback Systems

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Finally we are in a position to answer that
age old question …
Which is stronger
Intertemporal Price Discrimination
or
Operant Conditioning

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How would you change your prices if you knew
someone was about to leave?

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Related: If a user hasn’t bought something in the
first 8 days, they have only a 2% chance of
purchasing

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People who buy earlier, spend
more….

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These Books Have Untested (but
Testable) Theories and Hypotheses
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These Books Also Have Untested (but
Testable) Theories and Hypotheses
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These Are Not Textbooks
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Grandpa
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We Can Do Science Better
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N = 224

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Academic Collaborations
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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)

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System Up and Running
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Enormous Amounts of Semantically
Rich and Clean Data Puddling Up
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Thank You
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