Mobile application pricing

Joshua Gans

Information Economics and Policy, 2012, vol. 24, issue 1, 52-59

Abstract: This paper examines the pricing of mobile applications when application providers can either supply consumers directly or through a mobile platform (such as a smart phone or tablet). It is demonstrated that when platform access (i.e., purchasing a device) takes place in advance of application pricing, a non-trivial unravelling problem exists that rules out selling platform access at a positive price. Consequently, all platform revenues come from sharing application provider revenues. It is demonstrated that several restrictive conditions on application providers, such as most favoured customer clauses, can allow the platform provider to earn more profits and charge a positive access price increasing the likelihood the platform is provided.

Keywords: Platform; Two-sided markets; Complements; Most favoured customer clause (search for similar items in EconPapers)
JEL-codes: L17 L32 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:24:y:2012:i:1:p:52-59

DOI: 10.1016/j.infoecopol.2012.01.006

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