Client Risk Informedness in Brokered Cloud Services: An Experimental Pricing Study

Richard Shang*, Robert J. Kauffman, Jianhui Huan, Yinping Yang

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Service brokerage in cloud computing markets aggregates cloud resources to lower the cost and risk of their services and to customize them to address different client needs. This research proposes a mechanism for pricing brokered cloud computing services that includes guaranteed computing job completion and risk-based pricing. Using a laboratory experiment with 42 participants playing the role of cloud computing clients, we compare the economic performance of the pricing mechanism under different levels of client risk informedness and job duration. The results suggest that such risk informedness plays a major role in influencing the willingness-to-pay of clients for brokered services. By investigating the heterogeneity of client risk propensity, we explain the performance differences and find an interaction effect for risk propensity and risk informedness on the willingness-to-pay of clients. Based on our findings and the related causal inferences, we discuss the implications for the pricing strategies of cloud services brokers, as well as for those of cloud services vendors.
Original languageEnglish
Article number100893
JournalElectronic Commerce Research and Applications
Volume39
Issue numberJanuary-February
Number of pages16
ISSN1567-4223
DOIs
Publication statusPublished - 2020

Bibliographical note

Online: 30 October 2019.

Keywords

  • Cloud computing
  • Cloud services brokerage
  • Mechanism design
  • Pricing
  • Risk informedness
  • Risk propensity
  • Simulation experiments

Cite this

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title = "Client Risk Informedness in Brokered Cloud Services: An Experimental Pricing Study",
abstract = "Service brokerage in cloud computing markets aggregates cloud resources to lower the cost and risk of their services and to customize them to address different client needs. This research proposes a mechanism for pricing brokered cloud computing services that includes guaranteed computing job completion and risk-based pricing. Using a laboratory experiment with 42 participants playing the role of cloud computing clients, we compare the economic performance of the pricing mechanism under different levels of client risk informedness and job duration. The results suggest that such risk informedness plays a major role in influencing the willingness-to-pay of clients for brokered services. By investigating the heterogeneity of client risk propensity, we explain the performance differences and find an interaction effect for risk propensity and risk informedness on the willingness-to-pay of clients. Based on our findings and the related causal inferences, we discuss the implications for the pricing strategies of cloud services brokers, as well as for those of cloud services vendors.",
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Client Risk Informedness in Brokered Cloud Services : An Experimental Pricing Study. / Shang, Richard; Kauffman, Robert J.; Huan, Jianhui; Yang, Yinping.

In: Electronic Commerce Research and Applications, Vol. 39, No. January-February, 100893, 2020.

Research output: Contribution to journalJournal articleResearchpeer-review

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