Economics of shareware : How do uncertainty and piracy affect shareware quality and brand premium?

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

19 Scopus Citations
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  • Wendy Hui
  • Byungjoon Yoo
  • Kar Yan Tam


Original languageEnglish
Pages (from-to)580-594
Journal / PublicationDecision Support Systems
Issue number3
Publication statusPublished - Feb 2008
Externally publishedYes


Increased network speed has opened up new opportunities for developers to distribute their products as shareware through the Internet. This paper analyzes the interrelationships among key issues that are central to the software industry, including uncertainty, piracy, shareware quality and full version price. We show that customers' aversion to uncertainty of software quality tends to increase shareware quality while piracy tends to decrease it. Counter-intuitively, the perceived quality of the full version software or the trust towards the software developer does not affect the full version price and the profit of the firm when piracy is prevalent. © 2007 Elsevier B.V. All rights reserved.

Research Area(s)

  • Piracy, Pricing, Shareware economics, Uncertainty, Versioning