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Chinese Journal of Management Science ›› 2016, Vol. 24 ›› Issue (9): 91-98.doi: 10.16381/j.cnki.issn1003-207x.2016.09.011

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The Impact of Software Protection for Two-sided Price Strategies of Software Platform

CHENG Gui-sun, LI Qian   

  1. Faculty of Economics and Management, East China Normal University, Shanghai 200241, China
  • Received:2014-10-24 Revised:2015-10-29 Online:2016-09-20 Published:2016-09-30

Abstract: To characterize the impact of the software protection for the two-sided user pricing strategies of the software platform, a Hotelling model of the oligopoly competition of software platform is built considering the consumers and software developers' different access to software platform and the oligopoly market structure of software platform, which compares and analyses the relationship between the software protection and two-sided user price strategies of the e software platform. The results show under the two-sided end-user' singlehoming, the users' access fee and the software developers' license fee depend on the strength of their cross-group network effects and the users' access fee decrease with better software protection , but the license fee increase with better software protection. However, under the users' singlehoming and the software developers' multihoming, there are inverse correlation between the users' access fee and the strength of two-sided end-user' cross-group network effects, but the license fee is proportional to the strength of user' cross-group network effects and is inversely proportional to the strength of software developers' cross-group network effects. The impact of software protection on the users' access fee, depends on the comparison of marginal effect of the users' and software developers' cross-group network effects. These conclusions have important referential significant to the software protection and pricing strategies.

Key words: software platform, two-sided markets, cross network effect, software protection

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