Understanding the price drivers of successful apps in the mobile app market

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7 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)159-185
Number of pages27
JournalInternational Journal of Electronic Marketing and Retailing
Volume7
Publication statusPublished - 2016

All Science Journal Classification (ASJC) codes

  • Management Information Systems
  • Business and International Management
  • Marketing

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