Pricing Strategies of Mobile Apps and Their Effects on Piracy: An Empirical Study

Although the price of a digital product was identified as one of the determinants of committing digital piracy in the previous studies, the relationship between the price and the level of piracy has not been empirically tested with real market data. This study investigates the impact of price related factors on digital piracy in the context of the mobile app market. Particularly, it seeks to study the impact of app price, in-app purchase option, and free version on the level of app piracy. The results suggest that app price has a positive impact on the number of downloads of pirated apps while offering free version has a negative impact In addition, the number of downloads is more associated with the price for utility apps than game apps. Different from expectation, however, having in-app purchase option does not have a significant impact on the number of downloads of pirated apps.

[1]  Dennis F. Galletta,et al.  Software Piracy in the Workplace: A Model and Empirical Test , 2003, J. Manag. Inf. Syst..

[2]  K. R. Conner,et al.  Software piracy: an analysis of protection strategies , 1991 .

[3]  Kirk L. Wakefield,et al.  Situational price sensitivity: the role of consumption occasion, social context and income , 2003 .

[4]  James A. O'Brien,et al.  The Effect of Demographic Factors on Attitudes toward Software Piracy , 2016 .

[5]  Hoon Seok Choi,et al.  An Empirical Study of the Freemium Strategy for Mobile Apps: Evidence from the Google Play Market , 2012, ICIS.

[6]  Jooyoung Kim,et al.  The Power Of Affective Response And Cognitive Structure In Product-Trial Attitude Formation , 2007 .

[7]  S. Nason.  Free: The future of a radical price , 2010 .

[8]  Yoris A. Au,et al.  Is Digital Piracy An Enemy of the Mobile App Industry? An Empirical Study on Piracy of Mobile Apps , 2014 .

[9]  Sumit Sarkar,et al.  Speed Matters: The Role of Free Software Offer in Software Diffusion , 2009, J. Manag. Inf. Syst..

[10]  Robert W. Shoemaker,et al.  The Effects of Free Sample Promotions on Incremental Brand Sales , 2004 .

[11]  George E. Higgins,et al.  An Application of Deterrence Theory to Software Piracy , 2005 .

[12]  John Gallaugher,et al.  Understanding Network Effects in Software Markets: Evidence from Web Server Pricing , 2002, MIS Q..

[13]  A. Mattila,et al.  The impact of experiential consumption cognitions and emotions on behavioral intentions , 2008 .

[14]  Richard H. Moore.  Shoplifting in Middle America: Patterns and Motivational Correlates , 1984 .

[15]  Hsing K. Cheng,et al.  To Purchase or to Pirate Software: An Empirical Study , 1997, J. Manag. Inf. Syst..

[16]  Ivan P. L. Png,et al.  Software pricing and copyright enforcement: private profit vis-a-vis social welfare , 1999, ICIS.

[17]  Daniel Hoechle.  Robust Standard Errors for Panel Regressions with Cross-Sectional Dependence , 2007 .

[18]  Martha M. Eining,et al.  Software Piracy among Accounting Students: A Longitudinal Comparison of Changes and Sensitivity , 2006, J. Inf. Syst..

[19]  T. P. Cronan,et al.  Digital Piracy: Factors that Influence Attitude Toward Behavior , 2006 .

[20]  J. Burn,et al.  Softlifting and piracy: behavior across cultures , 2001 .

[21]  Ram D. Gopal,et al.  International Software Piracy: Analysis of Key Issues and Impacts , 1998, Inf. Syst. Res..

[22]  Gurpreet Dhillon,et al.  Software piracy: a view from Hong Kong , 2000, CACM.