Luo, XiaoxiaoZhang, Jie2017-12-282017-12-282018-01-03978-0-9981331-1-9http://hdl.handle.net/10125/50536This 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.10 pagesengAttribution-NonCommercial-NoDerivatives 4.0 InternationalStrategy, Information, Technology, Economics, and Society (SITES)Mobile app, Pay-per-download, Freemium, Duopoly, LearningConference Paper10.24251/HICSS.2018.647