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Freemium as an Optimal Strategy for Market Dominant Firms · Study

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ArticleFreemium as an Optimal Strategy for Market Dominant Firms

Zijun Shi2019

Article2019

Freemium as an Optimal Strategy for Market Dominant Firms

Zijun Shi · Kaifu Zhang · Kannan Srinivasan

86 citations·0/0 files stored·Marketing Science

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Digital Platforms and Economics Merger and Competition Analysis Consumer Market Behavior and Pricing

Abstract

We explain why dominant firms give away good-quality products for free when network externalities are present.

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References

1978Monopoly and product quality 2006Two-sided markets: a progress report 1986Technology Adoption in the Presence of Network Externalities 1996A Strategic Model of Social and Economic Networks 2007Chapter 31 Coordination and Lock-In: Competition with Switching Costs and Network Effects 1990New Product Diffusion Models in Marketing: A Review and Directions for Research 2006Pricing and commitment by two-sided platforms 1992Market Segmentation, Cannibalization, and the Timing of Product Introductions

Cited by

2021Competing on freemium: Digital competition with network effects 2021Multi-period price competition of blockchain-technology-supported and traditional platforms under network effect 2020Revisiting Location in a Digital Age: How Can Lead Markets Accelerate the Internationalization of Mobile Apps?2022Moving Consumers from Free to Fee in Platform-Based Markets: An Empirical Study of Multiplayer Online Battle Arena Games 2021On top of the game? The double‐edged sword of incorporating social features into freemium products

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Details

Year2019

Typearticle

Published2019-01-01

VenueMarketing Science

ISSN-L0732-2399

Languageen

Citations86

Files0 public / 0

ShelfDigital Platforms and Economics

Identifiers

doi10.1287/mksc.2018.1109

openalex_workW2902157206

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