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)

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

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Keywords

  • Piracy
  • Pricing
  • Shareware economics
  • Uncertainty
  • Versioning

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