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HomeAdvanced Materials ResearchAdvanced Materials Research Vols. 452-453Production Mode Choice and Price Competition in...

Production Mode Choice and Price Competition in the Presence of Network Effects: Shrink-Wrap via Cloud Service

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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.

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Management, Manufacturing and Materials Engineering

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Periodical:

Advanced Materials Research (Volumes 452-453)

Pages:

964-967

DOI:

https://doi.org/10.4028/www.scientific.net/AMR.452-453.964

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Online since:

January 2012

Authors:

Mei Yu Lee, Yao Hsien Lee, Ying Jui Lu

Keywords:

Cloud Service, Network Effects, Production Mode, Shrink-Wrap

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Сopyright:

© 2012 Trans Tech Publications Ltd. All Rights Reserved

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