An economic model for initial qualities and service prices of intermediary's web sites

In this paper, a mathematical model was introduced to analyze pricing and quality strategies for the web sites of electronic intermediaries. Especially, I focused on the intermediary sites that initiate their businesses by providing free services such as free e-mail, search, and directory services. Intermediaries may gather third party providers looking for new markets for their services, based on customers who want to use the free services. And intermediaries provide charged intermediary services to both of customers and providers. By analyzing the mathematical model, I can find optimal quality and prices to maximize the profit of intermediaries. And I can find also that intermediaries should make efforts to improve their productivity of developing their services to make profits.