Pay-per-download or Freemium: Revenue Models in a Competitive Mobile App Market

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dc.contributor.authorLuo, Xiaoxiao
dc.contributor.authorZhang, Jie
dc.date.accessioned2017-12-28T02:13:43Z
dc.date.available2017-12-28T02:13:43Z
dc.date.issued2018-01-03
dc.description.abstractThis paper examines the revenue model selection of app developers in a duopoly setting. Two developers offering vertically-differentiated apps can adopt either a pay-per-download or a freemium strategy. Under the pay-per-download strategy, consumers pay a fee to acquire the app. Under the freemium strategy, consumers are offered with a free basic version and can choose to pay an additional fee for the full version. A game theoretical model is used to analyze the competition in the presence of network effect and learning effect. We find that when the quality difference is moderate, the pay-per-download strategy is optimal for the high-quality app if the quality of basic version is low, otherwise freemium strategy is optimal. Responding to the pay-per-download strategy of the high-quality app, adopting the pay-per-download strategy is optimal for the low-quality app if quality of basic version is high, otherwise freemium strategy is adopted.
dc.format.extent10 pages
dc.identifier.doi10.24251/HICSS.2018.647
dc.identifier.isbn978-0-9981331-1-9
dc.identifier.urihttp://hdl.handle.net/10125/50536
dc.language.isoeng
dc.relation.ispartofProceedings of the 51st Hawaii International Conference on System Sciences
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subjectStrategy, Information, Technology, Economics, and Society (SITES)
dc.subjectMobile app, Pay-per-download, Freemium, Duopoly, Learning
dc.titlePay-per-download or Freemium: Revenue Models in a Competitive Mobile App Market
dc.typeConference Paper
dc.type.dcmiText

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