The Optimal Pricing of Computer Software and Other Products with High Switching Costs

@inproceedings{Ahtiala2004TheOP,
  title={The Optimal Pricing of Computer Software and Other Products with High Switching Costs},
  author={Pekka Ahtiala},
  year={2004}
}
The paper studies the determinants of the optimum prices of computer programs and their upgrades. It is based on the notion that because of the human capital invested in the use of a computer program by its user, this product has high switching costs, and on the finding that pirates are responsible for generating over 80 per cent of new software sales. A model to maximize the present value of the program to the program house is constructed to determine the optimal prices of initial programs and… CONTINUE READING