Penetration or Skimming? Pricing Strategies for Software Platforms Considering Asymmetric Cross-Side Network Effects

Skimming or Penetration? Strategic Dynamic Pricing for New Products

The literature provides some stylized guidelines for choosing between skimming and penetration pricing for new products in simple competitive scenarios. However, these guidelines do not resolve the practical dynamic pricing problem in the current complex dynamic environments, characterized by numerous brands, each with multiple products and price points, and differentiated on a variety of produ...

The Ecosystem of Software Platform: A Study of Asymmetric Cross-Side Network Effects and Platform Governance

In the context of software platforms, we examine how cross-side network effects (CNEs) on different platform sides (application-side and user-side) are temporally asymmetric, and how these CNEs are influenced by the platform’s governance policies. Informed by a perspective of value creation and capture, we theorize how the app-side and the userside react to each other with distinct value creati...

Network Effects, Pricing Strategies, and Optimal Upgrade Time in Software Provision

There are many products which have little or no value in isolation, but if combined with other products or services, they generate more value. The utility that a given user derives from these products depends upon the number of other users who consume the same products. This kind of positive consumption externality is defined as a network externality. Network externalities are pervasive in the ...

Network effects on standard software markets: a simulation model to examine pricing strategies

This paper examines strategies of standard software vendors, in view of the existence of network effects on standard software markets. In particular, we analyze if and under which conditions penetration pricing can be considered as a promising strategy. Our work is based on a simulation model, which provides the opportunity to examine the impact of alternative pricing strategies on the distribu...

Quantifying Cross-Network Effects in Online C2C Platforms