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| Author: | Gallaugher, J. M. Wang, Y.-M. |
| Title: | Understanding Network Effects in Software Markets: Evidence from Web Server |
| Journal: | MIS Quarterly
2002 : DEC, VOL. 26:4, p. 303-328 |
| Index terms: | PRICING NETWORKS MARKETS INTERNET |
| Language: | eng |
| Abstract: | Prior theoretical research has established that many software products are subject to network effects and exhibit the characteristics of two-sided markets. However, despite the importance of the software industry to the world economy, few studies have attempted to empirically examine these characteristics, or several others which theory suggests impact software price. This study develops and tests a research-grounded model of two-sided software markets that accounts for several key factors influencing software pricing, including network externalities, cross-market complementarities, standards, mindshare, and trial-ability. Applying the model to the context of the market for Web server software, several key findings are offered. |
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