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Are Free Apps the New Solution to Software Piracy? The Impact of the Freemium Strategy on Mobile App Piracy in the Presence of Network Effects

Author

Listed:
  • Hoon Seok Choi
  • Yoris A. Au

    (UTSA)

  • Charles Z. Liu

Abstract

This research revisits the issue of software piracy in the emerging mobile apps market. The study seeks to empirically examine the controversial impact of piracy on the market performance of the legitimate apps. In particular, the study attempts to empirically examine how the presence (or absence) of free app affects the extent of piracy, and consequently, the adoption of the paid apps in the mobile app market, and whether such relationships are moderated by varying degrees of network effects in these mobile apps. A set of hypotheses will be empirically tested using a longitudinal dataset collected from both legitimate and pirated mobile app markets over a six-month period. Based on the findings, the study will attempt to offer insights to app developers and market designers on how to create mechanisms to curb piracy, stem the resulting losses, and foster a healthy growth of the mobile app market.Length: 12 pages

Suggested Citation

  • Hoon Seok Choi & Yoris A. Au & Charles Z. Liu, 2014. "Are Free Apps the New Solution to Software Piracy? The Impact of the Freemium Strategy on Mobile App Piracy in the Presence of Network Effects," Working Papers 0192iscs, College of Business, University of Texas at San Antonio.
    • Handle: RePEc:tsa:wpaper:0192iscs
    as

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    References listed on IDEAS

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    Cited by:

    1. Bilal Bourkha & Adam Dewitte & Jeremy Tantely Ranjatoelina, 2015. "Organiser l'imitation d'un business model innovant : quatre propositions pour les entreprises," Working Papers hal-01202625, HAL.

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    More about this item

    Keywords

    software piracy; mobile apps; freemium strategy; network effects; panel data analysis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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