Free Trial Strategy of SaaS with Network Externalities

doi:10.3969/j.issn.1006-2475.2016.11.005

Abstract

Abstract: The software products with strong network externalities are society-oriented applications and located before or after the supply chain. They are transforming to Software as a Service. And those services are also offered for free trial to ease uers’ uncertainty and help the diffusion of Software as a Service. Taking network externalities into the free trial problem of SaaS with differences in the quality in the duopoly market, this paper studied the free trial problem in the presence of network externalities through the Bertrand competition model. According to the results, the network externality intensity affects the free trial duration and market profit of the low service quality SaaS provider, and also affects the range of consumer surplus and social welfare.
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Key words: network externalities, difference in the quality, Software as a Service, free trial

CLC Number:

TP393

SONG Qian-qian, MIAO Hong, WANG Nian-xin, GE Shi-lun. Free Trial Strategy of SaaS with Network Externalities[J]. Computer and Modernization, 2016, 0(11): 25-32,68.

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