Production Mode Choice and Price Competition in the Presence of Network Effects:Shrink-Wrap via Cloud Service
Published in Advanced Materials Research, 2012
indexing: “EI”
Title
Production Mode Choice and Price Competition in the Presence of Network Effects: Shrink-Wrap via Cloud Service
Authors
- Mei-Yu Lee, Department of Applied Financial Management, Yuanpei University, Taiwan
- Yao-Hsien Lee, Department of Finance, Chung Hua University, Taiwan
- Ying-Jui Lu, Department of Leisure and Recreeation Managment, China University of Technology, Taiwan
Journal name
Advanced Materials Research (EI)
Abstract
We investigate how firms facing different production modes of software service determine their production mode and pricing decisions in the presence of network effects. We develop a two-stage game model to examine the network effect on the choices of production mode and the strategic behavior of the firms. We find that if all firms adopt cloud service production mode, the resulting software price is higher than if they adopt shrink-wrapped production mode. We also find that network effects lower the level of market price.
Keywords
Cloud Service, Network Effects, Production Mode, Shrink-Wrap
Citation
Mei-Yu Lee, Yao-Hsien Lee, Ying-Jui Lu, 2012, Production Mode Choice and Price Competition in The Presence of Network Effects: Shrink-wrap via Cloud Service, Advanced Materials Research, 542-543, 964-967.
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Recommended citation: Mei-Yu Lee, Yao-Hsien Lee, Ying-Jui Lu, 2012, Production Mode Choice and Price Competition in The Presence of Network Effects: Shrink-wrap via Cloud Service, Advanced Materials Research, 542-543, 964-967.