DIRECTV: forecasting diffusion of a new technology prior to product launch
Interfaces - Special issue: marketing engineering
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
Designing free software samples: a game theoretic approach
Information Technology and Management
Economics of shareware: How do uncertainty and piracy affect shareware quality and brand premium?
Decision Support Systems
A hedonic study of network effects in the market for word processing software
Decision Support Systems - Special issue: Economics and information systems
Speed Matters: The Role of Free Software Offer in Software Diffusion
Journal of Management Information Systems
A Generalized Norton--Bass Model for Multigeneration Diffusion
Management Science
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Free software offer as a promotional tool has been employed by software firms of all sizes. In this research, we propose an extended multi-generation diffusion model that separates substitution from switching, and develop methodologies to help a firm determine the optimal number of free adoptions for each version. Our analyses show that due to the word-of-mouth effect, free offer can help increase a firm's total profit for all versions of a product. Furthermore, we find that in the presence of low-valuation free adopters, the optimal number of high-valuation free adopters decreases, the total number of free adopters increases, and the total profit improves substantially as a result.