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RESEARCH PRODUCT
Understanding the price drivers of successful apps in the mobile app market
Paolo RomaGandolfo Dominicisubject
media_common.quotation_subjectContext (language use)Sample (statistics)02 engineering and technologyTwo-sided marketApp storeMobile app market; Online distribution; Pricing; Two-sided marketManagement Information Systems020204 information systemsmental disorders0502 economics and business0202 electrical engineering electronic engineering information engineeringBusiness and International ManagementMarketingMobile app markethealth care economics and organizationsmedia_commonMarketingTwo-sided marketPrice skimming05 social sciencesAdvertisingSettore ING-IND/35 - Ingegneria Economico-GestionalePricing strategiesOnline distributionBusinessPricing050203 business & managementExternalityReputationdescription
In this paper, we take the perspective of app developers. Specifically, based on a sample of top paid apps from three major app stores, i.e., App Store, Google Play, and Blackberry World, we construct a hedonic price model to examine the role of relevant factors in price formation in the app market. Our results suggest a strong evidence of two-sided market effects. In fact, the lower price charged for apps operating as two-sided markets reflect the strategy of subsidising users, due to the positive cross-side externalities they exert on valuable third parties. Surprisingly, the effects of trialability, in-app purchase and mechanisms to build reputation are not significant in the context of successful apps. Finally, we find weak evidence that developers of top paid apps prefer price skimming to penetration price strategies.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2016-01-01 | International Journal of Electronic Marketing and Retailing |