Economics of shareware: How uncertainty and piracy affect shareware quality and brand premium

In the past, shareware has been mainly used to market small and simple software, the developers of which could not afford to distribute their products through a physical retail channel. Shareware was often distributed through complimentary floppy or CD disks attached to PC or games magazines. However, with increased network speed, it has become viable for digital files, even large ones, to be distributed over the Internet. The Internet channel has opened up new opportunities for developers, small or large, to distribute their products as shareware to reach consumers directly. Indeed, in recent years, we begin to see big firms, including Microsoft, Adobe, and Google, distributing their products as shareware. We find that shareware is an increasingly widespread marketing strategy for selling software products via the Web. Because the emergence of shareware has not been driven by economic concerns, there is limited analytical research on shareware. However, as shareware gains in popularity as a strategy to reduce consumers\u27 uncertainty about new software products, there is a need for deeper understanding of the economic implications of its use. 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\u27 aversion to the 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 toward the software developer does not affect the full version price and the profit of the firm when piracy is prevalent

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

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\u27 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. © 2007 Elsevier B.V. All rights reserved

The optimal number of versions: Why does Goldilocks pricing work for information goods?

The literature in general suggests that selling multiple versions is more profitable than selling only a single version. However, how many versions should be offered is not as clear. Classical pricing studies suggest providing as many versions as the number of customer types, whereas some studies in information systems suggest providing only one or two versions. In reality, firms typically provide more than one or two versions, such as three in the case of Goldilocks pricing. This study explains the discrepancies in these results and observations by showing that, although profit increases with more versions, the marginal benefit of an additional version decreases rapidly. Therefore, firms sell few versions even in the presence of very small versioning-related costs such as menu and cognitive costs. This study analyzes the effects of these costs, and shows that cognitive costs have more profound effects on versioning than menu costs. © 2008 M.E. Sharpe, Inc

Technology-assisted learning and learning style: A longitudinal field experiment

From a student\u27s perspective, technology-assisted learning provides convenient access to interactive contents in a hyperlinked multimedia environment that allows increased control over the pace and timing of the presented material. Previous research examining different aspects of technology-assisted learning has found equivocal results concerning its effectiveness and outcomes. We extend prior studies by conducting a longitudinal field experiment to compare technology-assisted with face-to-face learning for students\u27 learning of English. Our comparative investigation focuses on learning effectiveness, perceived course learnability, learning-community support, and learning satisfaction. In addition, we analyze the effects of different learning styles in moderating the effectiveness of and satisfaction with technology-assisted learning. Overall, our results show significantly greater learning effectiveness with technology-assisted learning than with conventional face-to-face learning. Learning style has noticeable influences on the effectiveness and outcomes of technology-assisted learning. We also observe an apparently important interaction effect with the medium for delivery, which may partially explain the equivocal results of previous research. © 2007 IEEE