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Optimal Software Free Trial Strategy: Limited Version, Time‐locked, or Hybrid?
Author(s) -
Cheng Hsing Kenneth,
Li Shengli,
Liu Yipeng
Publication year - 2015
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/poms.12248
Subject(s) - computer science , exploit , software , key (lock) , quality (philosophy) , operations research , computer security , engineering , philosophy , epistemology , programming language
Limited version, time‐locked, and hybrid are three software free trial strategies employed by software firms to exploit increased installed base and/or reduction of consumers' uncertainty about software quality. We develop an analytical model to examine these three software free trial strategies. We find that the hybrid strategy weakly dominates the limited and time‐locked versions, and the intensity of the network effects is a key factor determining which strategy is optimal.