| Article ID: | iaor20052223 |
| Country: | South Korea |
| Volume: | 21 |
| Issue: | 3 |
| Start Page Number: | 1 |
| End Page Number: | 12 |
| Publication Date: | Nov 2004 |
| Journal: | Korean Management Science Review |
| Authors: | Yoo Keuk Ryoul |
The paper demonstrates that versioning of digital products occurs more frequently than that of physical products because of low marginal cost. The versioning occurs no matter what a customer knows his/her reservation price. Low-quality version will not be produced when the difference between reservation prices is very large. The paper also shows that a firm tries to lower the quality of low-quality product to prevent customers with high reservation prices from purchasing low-quality product.