Selling information products: Sale channel selection and versioning strategy with network externality

Selling information products: Sale channel selection and versioning strategy with network externality

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Article ID: iaor201527133
Volume: 166
Issue: 2
Start Page Number: 1
End Page Number: 10
Publication Date: Aug 2015
Journal: International Journal of Production Economics
Authors: , ,
Keywords: economics, supply & supply chains, networks, marketing, retailing
Abstract:

  • We analyzed decision behaviors of a supplier, a retailer, and consumers in a supply chain.
  • A sale channel model was built to maximize supplier's profit based on fixed‐fee policy.
  • A supplier prefers versioning strategy when network externality exists in market.
  • The single‐version strategy is more preferable without network externality.
  • The best strategy distributes high‐quality version via direct sale and low‐quality version via retailing.

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