What if you had to pay for networked services? Willingness to pay for Facebook Messenger

Abstract

In this paper, Norwegian consumers’ willingness-to-pay for layered, networked services is examined using a discrete choice experiment. A multinomial logit model is estimated based on attributes and respective levels from the choice experiment to determine willingness-to-pay. The attributes were chosen based on their connective and conductive abilities. The predicted probabilities from the multinomial logit model are calculated to examine price levels for certain characteristics of layered services. The results suggest that, among other variables, a large network size and strong network composition are the most valuable attributes, most likely linked to network effects. Our calculations can further be utilized by managers when determining pricing strategies for value networks.