Free Trial or No Free Trial: Optimal Software Product Design with Network Externalities
نویسنده
چکیده
Software free trial is a common practice that has both positive and negative effects. On the one hand, it helps firms to exploit the positive network externalities by building up the total user base; on the other hand, it cannibalizes partial demand for the commercial software. The objective of my dissertation is to determine the conditions under which the firms should introduce the free trial and how should the firms design the quality of the free trial optimally. The impact of competition on free trial decisions is analyzed in the end.
منابع مشابه
When Free Trials Meet Online Reviews: the Impact of Informativeness of Online Reviews and Perceived Quality homogeneity
Experience products (e.g., Apps) require purchase or sampling in order to evaluate product quality. Online content reviews and free trial version of the product both can provide information for consumers to reduce quality uncertainty when evaluate product quality. This paper studies the firm’s pricing strategy of apps when free trials meet online reviews by considering the impact of informative...
متن کاملVersioning information goods with network externalities
Positive externalities characterize the consumption of a majority class of information goods and services such as software, e-mail, and online content and services including virtual communities. We show that network externality is critical for the market segmentation and product line decisions of an information goods seller. With externality, a monopoly of multiple existing products offers exac...
متن کاملUnderstanding Network Effects in Software Markets: Evidence from Web Server Pricing
Prior theoretical research has established that many software products are subject to network effects and exhibit the characteristics of two-sided markets. However, despite the importance of the software industry to the world economy, few studies have attempted to empirically examine these characteristics, or several others which theory suggests impact software price. This study develops and te...
متن کاملDesigning free software samples: a game theoretic approach
We develop a vertical differentiation game-theoretic model that addresses the issue of designing free software samples (shareware) for attaining follow-on sales. When shareware can be reinstalled, cannibalization of sales of the commercial product may ensue. We analyze the optimal design of free software according to two characteristics: the evaluation period allotted for sampling (potentially ...
متن کاملA Neural Network Method Based on Mittag-Leffler Function for Solving a Class of Fractional Optimal Control Problems
In this paper, a computational intelligence method is used for the solution of fractional optimal control problems (FOCP)'s with equality and inequality constraints. According to the Ponteryagin minimum principle (PMP) for FOCP with fractional derivative in the Riemann- Liouville sense and by constructing a suitable error function, we define an unconstrained minimization problem. In the optimiz...
متن کامل