Optimal strategic pricing of reproducible consumer products
Management Science
New product development: the performance and time-to-market tradeoff
Management Science
Optimal Pricing Strategy for New Products
Management Science
DIRECTV: forecasting diffusion of a new technology prior to product launch
Interfaces - Special issue: marketing engineering
An integrated model of information systems adoption in small businesses
Journal of Management Information Systems
Dynamic price elasticity and the diffusion of mainframe computing
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Implementation of electronic data interchange: an innovation diffusion perspective
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Network effects and the impact of free goods: an analysis of the web server market
International Journal of Electronic Commerce - Special issue: Electronic commerce and market transformation
Comments on "A New Product Growth for Model Consumer Durables"
Management Science
The Impact of Open Source Software on the Strategic Choices of Firms Developing Proprietary Software
Journal of Management Information Systems
How to give away software with successive versions
Decision Support Systems
Measuring Information Diffusion in an Online Community
Journal of Management Information Systems
Information Systems Research
The attraction of contributors in free and open source software projects
The Journal of Strategic Information Systems
International Journal of Business Information Systems
| Hi-index | 0.00 |
Many software products are available free of charge. While the benefits resulting from network externality have been examined in the related literature, the effect of free offer on the diffusion of new software has not been formally analyzed. We show in this study that even if other benefits do not exist, a software firm can still benefit from giving away fully functioning software. This is due to the accelerated diffusion process and subsequently the increased net present value of future sales. By adapting the Bass diffusion model to capture the impact of free software offer, we provide a methodology to determine the optimal number of free adopters. We show that the optimal free offer solution depends on the discount rate, the length of the demand window, and the ratio of low-valuation to high-valuation free adopters. Our methodology is shown to be applicable for both fixed and dynamic pricing strategies.