Economics of shareware : how do uncertainty and piracy affect shareware quality and brand premium?

Wendy HUI, Byungjoon Yoo, Kar Yan Tam

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

17 Citations (Scopus)

Abstract

Increased network speed has opened up new opportunities for developers to distribute their products as shareware through the Internet. This paper analyzes the interrelationships among key issues that are central to the software industry, including uncertainty, piracy, shareware quality and full version price. We show that customers' aversion to uncertainty of software quality tends to increase shareware quality while piracy tends to decrease it. Counter-intuitively, the perceived quality of the full version software or the trust towards the software developer does not affect the full version price and the profit of the firm when piracy is prevalent.

Original languageEnglish
Pages (from-to)580-594
Number of pages15
JournalDecision Support Systems
Volume44
Issue number3
Early online date3 Aug 2007
DOIs
Publication statusPublished - Feb 2008
Externally publishedYes

Fingerprint

Uncertainty
Software
Economics
Profitability
Internet
Industry
Piracy
Premium
Developer
Perceived quality
Software quality
Profit
Interrelationship
Software industry
World Wide Web

Keywords

  • Piracy
  • Pricing
  • Shareware economics
  • Uncertainty
  • Versioning

Cite this

@article{a3441fd789cc46d4adcf2a388fb4004a,
title = "Economics of shareware : how do uncertainty and piracy affect shareware quality and brand premium?",
abstract = "Increased network speed has opened up new opportunities for developers to distribute their products as shareware through the Internet. This paper analyzes the interrelationships among key issues that are central to the software industry, including uncertainty, piracy, shareware quality and full version price. We show that customers' aversion to uncertainty of software quality tends to increase shareware quality while piracy tends to decrease it. Counter-intuitively, the perceived quality of the full version software or the trust towards the software developer does not affect the full version price and the profit of the firm when piracy is prevalent.",
keywords = "Piracy, Pricing, Shareware economics, Uncertainty, Versioning",
author = "Wendy HUI and Byungjoon Yoo and Tam, {Kar Yan}",
year = "2008",
month = "2",
doi = "10.1016/j.dss.2007.07.009",
language = "English",
volume = "44",
pages = "580--594",
journal = "Decision Support Systems",
issn = "0167-9236",
publisher = "Elsevier",
number = "3",

}

Economics of shareware : how do uncertainty and piracy affect shareware quality and brand premium? / HUI, Wendy; Yoo, Byungjoon; Tam, Kar Yan.

In: Decision Support Systems, Vol. 44, No. 3, 02.2008, p. 580-594.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

TY - JOUR

T1 - Economics of shareware : how do uncertainty and piracy affect shareware quality and brand premium?

AU - HUI, Wendy

AU - Yoo, Byungjoon

AU - Tam, Kar Yan

PY - 2008/2

Y1 - 2008/2

N2 - Increased network speed has opened up new opportunities for developers to distribute their products as shareware through the Internet. This paper analyzes the interrelationships among key issues that are central to the software industry, including uncertainty, piracy, shareware quality and full version price. We show that customers' aversion to uncertainty of software quality tends to increase shareware quality while piracy tends to decrease it. Counter-intuitively, the perceived quality of the full version software or the trust towards the software developer does not affect the full version price and the profit of the firm when piracy is prevalent.

AB - Increased network speed has opened up new opportunities for developers to distribute their products as shareware through the Internet. This paper analyzes the interrelationships among key issues that are central to the software industry, including uncertainty, piracy, shareware quality and full version price. We show that customers' aversion to uncertainty of software quality tends to increase shareware quality while piracy tends to decrease it. Counter-intuitively, the perceived quality of the full version software or the trust towards the software developer does not affect the full version price and the profit of the firm when piracy is prevalent.

KW - Piracy

KW - Pricing

KW - Shareware economics

KW - Uncertainty

KW - Versioning

UR - http://www.scopus.com/inward/record.url?scp=36849028648&partnerID=8YFLogxK

U2 - 10.1016/j.dss.2007.07.009

DO - 10.1016/j.dss.2007.07.009

M3 - Journal Article (refereed)

VL - 44

SP - 580

EP - 594

JO - Decision Support Systems

JF - Decision Support Systems

SN - 0167-9236

IS - 3

ER -