Freemium as an Optimal Strategy for Market Dominant Firms
Author
Abstract
Suggested Citation
DOI: 10.1287/mksc.2018.1109
Download full text from publisher
References listed on IDEAS
- Jean‐Charles Rochet & Jean Tirole, 2006.
"Two‐sided markets: a progress report,"
RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
- Rochet, Jean-Charles & Tirole, Jean, 2005. "Two-Sided Markets : A Progress Report," IDEI Working Papers 275, Institut d'Économie Industrielle (IDEI), Toulouse.
- Jean Tirole & Jean-Charles Rochet, 2006. "Two-Sided Markets : A Progress Report," Post-Print hal-00173715, HAL.
- Marius F. Niculescu & D. J. Wu, 2014. "Economics of Free Under Perpetual Licensing: Implications for the Software Industry," Information Systems Research, INFORMS, vol. 25(1), pages 173-199, March.
- Bing Jing & Z. Zhang, 2011. "Product line competition and price promotions," Quantitative Marketing and Economics (QME), Springer, vol. 9(3), pages 275-299, September.
- Moen, Espen R. & Riis, Christian & Fjeldstad, Øystein, 2010. "Competition with Local Network Externalities," CEPR Discussion Papers 7778, C.E.P.R. Discussion Papers.
- Jackson, Matthew O. & Wolinsky, Asher, 1996.
"A Strategic Model of Social and Economic Networks,"
Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
- Matthew O. Jackson & Asher Wolinsky, 1994. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Matthew O. Jackson & Asher Wolinsky, 1995. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-841, August.
- Andrei Hagiu, 2006. "Pricing and Commitment by Two-Sided Platforms," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 720-737, Autumn.
- Wagner, T. & Benlian, Alexander & Hess, Thomas, 2014. "Converting freemium customers from free to premium - The role of the perceived premium fit in the case of music as a service," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 66722, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
- Rabik Ar Chatterjee & Jehoshua Eliashberg, 1990. "The Innovation Diffusion Process in a Heterogeneous Population: A Micromodeling Approach," Management Science, INFORMS, vol. 36(9), pages 1057-1079, September.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
- Farrell, Joseph & Klemperer, Paul, 2007.
"Coordination and Lock-In: Competition with Switching Costs and Network Effects,"
Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 31, pages 1967-2072,
Elsevier.
- Klemperer, Paul & Farrell, Joseph, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," CEPR Discussion Papers 5798, C.E.P.R. Discussion Papers.
- Joseph Farrell & Paul Klemperer, 2006. "Co-ordination and Lock-in: Competition with Switching Costs and Network Effects," Economics Papers 2006-W07, Economics Group, Nuffield College, University of Oxford.
- Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Competition Policy Center, Working Paper Series qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Banerji, A. & Dutta, Bhaskar, 2009.
"Local network externalities and market segmentation,"
International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 605-614, September.
- Banerji, A & Dutta, Bhaskar, 2005. "Local Network Externalities and Market Segmentation," The Warwick Economics Research Paper Series (TWERPS) 725, University of Warwick, Department of Economics.
- A. Banerji & Bhaskar Dutta, 2008. "Local network externalities and market segmentation," Discussion Papers 08-13, Indian Statistical Institute, Delhi.
- Banerji, A. & Dutta, Bhaskar, 2005. "Local Network Externalities and Market Segmentation," Economic Research Papers 269619, University of Warwick - Department of Economics.
- Jing, Bing, 2007. "Network externalities and market segmentation in a monopoly," Economics Letters, Elsevier, vol. 95(1), pages 7-13, April.
- Anderson, Simon P. & Celik, Levent, 2015.
"Product line design,"
Journal of Economic Theory, Elsevier, vol. 157(C), pages 517-526.
- Anderson, Simon & Celik, Levent, 2014. "Product Line Design," CEPR Discussion Papers 10324, C.E.P.R. Discussion Papers.
- Preyas Desai & Sunder Kekre & Suresh Radhakrishnan & Kannan Srinivasan, 2001. "Product Differentiation and Commonality in Design: Balancing Revenue and Cost Drivers," Management Science, INFORMS, vol. 47(1), pages 37-51, January.
- Preyas S. Desai, 2001. "Quality Segmentation in Spatial Markets: When Does Cannibalization Affect Product Line Design?," Marketing Science, INFORMS, vol. 20(3), pages 265-283, August.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
- K. Sridhar Moorthy & I. P. L. Png, 1992. "Market Segmentation, Cannibalization, and the Timing of Product Introductions," Management Science, INFORMS, vol. 38(3), pages 345-359, March.
- A. Ye(scedilla)im Orhun, 2009. "Optimal Product Line Design When Consumers Exhibit Choice Set-Dependent Preferences," Marketing Science, INFORMS, vol. 28(5), pages 868-886, 09-10.
- Cheng, Hsing Kenneth & Tang, Qian Candy, 2010. "Free trial or no free trial: Optimal software product design with network effects," European Journal of Operational Research, Elsevier, vol. 205(2), pages 437-447, September.
- Andrei Hagiu, 2006. "Pricing and commitment by two‐sided platforms," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 720-737, September.
- Wagner, C. & Benlian, Alexander & Hess, Thomas, 2014. "Converting freemium customers from free to premium - The role of the perceived premium fit in the case of music as a service," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 63495, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
- Wagner, T. & Benlian, Alexander & Hess, Thomas, 2014. "Converting freemium customers from free to premium - The role of the perceived premium fit in the case of music as a service," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 69900, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
- Zhang, Qiao & Zaccour, Georges & Zhang, Jianxiong & Tang, Wansheng, 2020. "Strategic pricing under quality signaling and imitation behaviors in supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
- Le Wang & Paul Benjamin Lowry & Xin (Robert) Luo & Han Li, 2023. "Moving Consumers from Free to Fee in Platform-Based Markets: An Empirical Study of Multiplayer Online Battle Arena Games," Information Systems Research, INFORMS, vol. 34(1), pages 275-296, March.
- José A. Novo‐Peteiro, 2023. "Product design with attribute dependence," Manchester School, University of Manchester, vol. 91(4), pages 361-385, July.
- Chutian Wang & Bo Zhou & Yogesh V. Joshi, 2024. "Endogenous Consumption and Metered Paywalls," Marketing Science, INFORMS, vol. 43(1), pages 158-177, January.
- Lei Zhou & Yue Qi & Xinshang You, 2023. "Research on Time to Market and Pricing of Platform Products in a Competitive Environment," Sustainability, MDPI, vol. 15(7), pages 1-19, March.
- Xiaoyan Chen & Wei Geng, 2022. "Enroll now, pay later: optimal pricing and nudge efforts for massive-online-open-courses providers," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 1003-1018, June.
- Rodrigo Belo & Ting Li, 2022. "Social Referral Programs for Freemium Platforms," Management Science, INFORMS, vol. 68(12), pages 8933-8962, December.
- Kevin J. Boudreau & Lars Bo Jeppesen & Milan Miric, 2022. "Competing on freemium: Digital competition with network effects," Strategic Management Journal, Wiley Blackwell, vol. 43(7), pages 1374-1401, July.
- Enache, Andreea & Friberg, Richard & Wiklander, Magnus, 2023. "Demand for in-app purchases in mobile apps—A difference-in-difference approach," International Journal of Industrial Organization, Elsevier, vol. 88(C).
- Hongshuang (Alice) Li, 2022. "Converting free users to paid subscribers in the SaaS context: The impact of marketing touchpoints, message content, and usage," Production and Operations Management, Production and Operations Management Society, vol. 31(5), pages 2185-2203, May.
- Yuichiro Kamada & Aniko Öry, 2020.
"Contracting with Word-of-Mouth Management,"
Management Science, INFORMS, vol. 66(11), pages 5094-5107, November.
- Yuichiro Kamada & Aniko Ory, 2016. "Contracting with Word-of-Mouth Management," Cowles Foundation Discussion Papers 2048, Cowles Foundation for Research in Economics, Yale University.
- Yuichiro Kamada & Aniko Ory, 2016. "Contracting with Word-of-Mouth Management," Cowles Foundation Discussion Papers 2048R, Cowles Foundation for Research in Economics, Yale University, revised Sep 2017.
- Yuichiro Kamada & Aniko Ory, 2016. "Contracting with Word-of-Mouth Management," Cowles Foundation Discussion Papers 2048R2, Cowles Foundation for Research in Economics, Yale University, revised Aug 2018.
- Yunke Mai & Bin Hu, 2023. "Optimizing Free-to-Play Multiplayer Games with Premium Subscription," Management Science, INFORMS, vol. 69(6), pages 3437-3456, June.
- Haenlein, Michael & Libai, Barak & Muller, Eitan, 2023. "Satiation and cross promotion: Selling and swapping users in mobile games," International Journal of Research in Marketing, Elsevier, vol. 40(2), pages 342-361.
- Joost Rietveld & Joe N. Ploog, 2022. "On top of the game? The double‐edged sword of incorporating social features into freemium products," Strategic Management Journal, Wiley Blackwell, vol. 43(6), pages 1182-1207, June.
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Xiaoyan Chen & Wei Geng, 2022. "Enroll now, pay later: optimal pricing and nudge efforts for massive-online-open-courses providers," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 1003-1018, June.
- Tang, Hua & Chen, Jing & Ai, Xingzheng & Li, Xiaojing & He, Haojia, 2023. "First-party content decision under competitive hardware/software platforms: Free vs. charge," European Journal of Operational Research, Elsevier, vol. 311(3), pages 1068-1083.
- José A. Novo‐Peteiro, 2023. "Product design with attribute dependence," Manchester School, University of Manchester, vol. 91(4), pages 361-385, July.
- Jullien, Bruno & Pavan, Alessandro & Rysman, Marc, 2021.
"Two-sided Markets, Pricing, and Network Effects,"
TSE Working Papers
21-1238, Toulouse School of Economics (TSE).
- Bruno Jullien & Alessandro Pavan & Marc Rysman, 2022. "Two-sided Markets, Pricing, and Network Effects," Working Papers hal-03629451, HAL.
- Bruno Jullien & Alessandro Pavan & Marc Rysman, 2021. "Two-sided markets, pricing, and network effects," Post-Print hal-03828345, HAL.
- Pavan, Alessandro & Jullien, Bruno & Rysman, Marc, 2021. "Two-sided Markets, Pricing, and Network Effects," CEPR Discussion Papers 16480, C.E.P.R. Discussion Papers.
- Calvano, Emilio & Polo, Michele, 2021.
"Market power, competition and innovation in digital markets: A survey,"
Information Economics and Policy, Elsevier, vol. 54(C).
- Calvano, Emilio & Polo, Michele, 2020. "Market Power, Competition and Innovation in digital markets: a survey," CEPR Discussion Papers 14314, C.E.P.R. Discussion Papers.
- Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107069978.
- Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899.
- Kevin J. Boudreau & Lars Bo Jeppesen & Milan Miric, 2022. "Competing on freemium: Digital competition with network effects," Strategic Management Journal, Wiley Blackwell, vol. 43(7), pages 1374-1401, July.
- Oz Shy, 2011.
"A Short Survey of Network Economics,"
Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 38(2), pages 119-149, March.
- Oz Shy, 2010. "A short survey of network economics," Working Papers 10-3, Federal Reserve Bank of Boston.
- Edward G. Anderson & Geoffrey G. Parker & Burcu Tan, 2014. "Platform Performance Investment in the Presence of Network Externalities," Information Systems Research, INFORMS, vol. 25(1), pages 152-172, March.
- Kang Li & Jingwei Zhang & Lunchuan Zhang, 2021. "Optimal Software Feature-Limited Freemium Model Design: A New Consumer Learning Theoretical Framework," Mathematics, MDPI, vol. 9(9), pages 1-24, April.
- Ron Adner & Jianqing Chen & Feng Zhu, 2020. "Frenemies in Platform Markets: Heterogeneous Profit Foci as Drivers of Compatibility Decisions," Management Science, INFORMS, vol. 66(6), pages 2432-2451, June.
- Wang, Jin, 2021. "Do birds of a feather flock together? Platform’s quality screening and end-users’ choices theory and empirical study of online trading platforms," International Journal of Industrial Organization, Elsevier, vol. 75(C).
- Min-Seok Pang & Hila Etzion, 2012. "Research Note --- Analyzing Pricing Strategies for Online Services with Network Effects," Information Systems Research, INFORMS, vol. 23(4), pages 1364-1377, December.
- Philipp Brüggemann & Nina Lehmann-Zschunke, 2023. "How to reduce termination on freemium platforms—literature review and empirical analysis," Journal of Marketing Analytics, Palgrave Macmillan, vol. 11(4), pages 707-721, December.
- Jan Frederic Nerbel & Markus Kreutzer, 2023. "Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-20, December.
- Yan, Xiaoming & Zhao, Wenhan & Yu, Yugang, 2022. "Optimal product line design with reference price effects," European Journal of Operational Research, Elsevier, vol. 302(3), pages 1045-1062.
- Navarro, Noemí, 2012.
"Price and quality decisions under network effects,"
Journal of Mathematical Economics, Elsevier, vol. 48(5), pages 263-270.
- Noemí Navarro, 2012. "Price and quality decisions under network effects," Cahiers de recherche 12-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
- Alexei Parakhonyak & Nick Vikander, 2019.
"Optimal Sales Schemes for Network Goods,"
Management Science, INFORMS, vol. 65(2), pages 819-841, February.
- Alexei Parakhonyak & Nick Vikander, 2013. "Optimal sales schemes for network goods," HSE Working papers WP BRP 41/EC/2013, National Research University Higher School of Economics.
- Alexei Parakhonyak & Nick Vikander, 2013. "Optimal Sales Schemes for Network Goods," Discussion Papers 13-11, University of Copenhagen. Department of Economics.
- Jingtao Yi & Jinqiu He & Lihong Yang, 2019. "Platform heterogeneity, platform governance and complementors’ product performance: an empirical study of the mobile application industry," Frontiers of Business Research in China, Springer, vol. 13(1), pages 1-20, December.
More about this item
Keywords
analytic models; game theory; pricing; network externality; product quality;All these keywords.
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:38:y:2019:i:1:p:150-169. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.