The introduction of product upgrades in a competitive environment is commonly observed in the software industry. When introducing a new product, a software vendor may employ behavior-based price discrimination (BBPD) by offering a discount over its market price to entice existing customers of...

Access to a platform's services often requires consumers to use a complementary hardware product or service, e.g., Internet service is needed to access the YouTube platform. Typically, such access products are provided by third-party firms. More recently, however, some major platforms like...

Customers often evaluate products at brick-and-mortar stores to identify their “best fit” product but buy it for a lower price at a competing online retailer. This free-riding behavior by customers is referred to as “showrooming” and we show that this is detrimental to the profits of the...

In this paper, we model competition between two software product vendors, an incumbent and entrant, with specific focus on the role of switching costs. Contrary to conventional wisdom, we find that under certain conditions the switching costs imposed by the incumbent's product could actually...

In this paper, we extend the understanding of versioning strategy of an information goods monopolist and provide new insights on when versioning is optimal. To do so, we derive the optimal product line or versions of an information good and the corresponding prices. By relaxing common...

The presence of an open source software community has provided firms with a non-monetary compensation dimension: the firm can substitute wages for the flexibility it gives its programmers to participate in open source projects. The problem for the software firm is to determine the optimal extent...