Science and Technology Indonesia e-ISSN:2580-4391 p-ISSN:2580-4405 Vol. 6, No. 4, October 2021 Research Paper Analysis of Information Service Pricing Scheme Model Based on Customer Self-Selection Indrawati 1 , Fitri Maya Puspita 1 *, Resmadona 1 , Evi Yuliza 1 , Oki Dwipurwani 1 , Sisca Octarina 1 1 Mathematics Department, Faculty of Mathematics and Natural Sciences, Sriwijaya University, Palembang, 30662, Indonesia *Corresponding author: fitrimayapuspita@unsri.ac.id Abstract This study attempts to analyze pricing schemes with monitoring cost and marginal cost for perfect substitute and quasi-linear utility functions for achieving Internet service Provider (ISP) in gaining benefit. Two types of customers analyzed, namely customers who are heterogeneous (both high-end and low-end) as well as heterogeneous customers (high-demand and low-demand) based on Flat-fee, usage-based, and two-part tariff are the three types of pricing methods employed. The results show that usage-based pricing schemes gain maximum profit optimal for heterogeneous customers (high-end and low-end), while for heterogeneous customers (high-demand and low-demand) type of pricing scheme two-part tariff obtains maximum profit optimal. The results of this study are more directed to the lemma of the perfect substitute utility function which compares the lemma of heterogeneous customers. This model was solved using LINGO 13.0 software and ISP to get maximum profit. Keywords Utility Function, Perfect Substitute, Marginal Cost, Monitoring Cost, Pricing Schemes, Heterogeneous Customers Received: 25 July 2021, Accepted: 14 October 2021 https://doi.org/10.26554/sti.2021.6.4.337-343 1. INTRODUCTION Internet is a tool for technology that can be used to reach the information needs of its customers. Internet service providers or ISPs try to share the best capacity to internet users and to achieve the highest revenue (Indrawati et al., 2015) . Bundling is a strategy carried out by combining two or more specific products into a sales package (Gu et al., 2011; Kopczewski et al., 2018; Yassine et al., 2018; Ye et al., 2017). The utility function Sitepu et al. (2016) is usually related to the satisfaction level that users receive compensation for the use of information services, especially those related to maximizing profits in achieving certain goals and namely as A = i ( m 1 , m 2 ,..., m ˆ n ) which means that m 1 , m 2 ,..., m ˆ n con- tribute user utility (Kuo and Liao, 2007; Merayo et al., 2017) indicating goal-satisfaction. Further research on current inter- net pricing schemes has involved other utility functions that are often used such as the original Cobb-Douglas utility func- tion (Puspita et al., 2020b; Sitepu et al., 2017b), quasi-linear, perfect substitute (Sitepu et al., 2017a) , and bandwidth func- tion (Guan et al., 2008; Indrawati et al., 2015; Zu-Xin et al., 2009; Moriya et al., 2005) utilized in three types of infor- mation service pricing systems, namely flat-fee, usage-based and two-part tariff (Gizelis and Vergados, 2010; Puspita et al., 2020a; Puspita et al., 2021) both analytically and as MINLP (Mixed Integer Nonlinear Programming) (Barrios and Cruz, 2017; Giraldo, 2017) with the help of LINGO (Cunningham and Schrage, 2004; Schrage, 2009) application software. The perfect substitute utility function was one important utility func- tion to be selected to measure the satisfaction of the customers due to its linearity. The utility function is measurements of customer satisfaction indirectly (Hitt and Chen, 2005). So far, past research focus on the pricing of information pricing schemes have been conducted (Indrawati et al., 2014; Sitepu et al., 2017b; Sitepu et al., 2017a; Wu and Banker, 2010) and also with the added parameters such as marginal dan monitoring costs. However, this research only focus on the pricing for information services without considering customer self-selection (Rabbani et al., 2017) . Customer self-selection is based on packages or schemes (Varadarajan, 2020) to be offered to various customers (Rabbani et al., 2017). In this recent situation, customer self-selection through products or services offered is critical and needs to be developed, so it causes a gap that has to be explored more. The research needs to be critically explained in detail to show the relationship between the pricing scheme of information service and the ability of customers to select its service (Zhou et al., 2020). Then, our contribution will be exploring new formulations through lemmas to show which pricing methods provide the