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Software piracy in the presence of open source alternatives

2017Journal article Open access
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dc.contributor.authorMachado, Fernando S.
dc.contributor.authorSainam, Preethika
dc.contributor.authorRaghu, T. S.
dc.contributor.authorSinha, Rajiv
dc.date.accessioned2021-06-08T13:38:55Z
dc.date.available2021-06-08T13:38:55Z
dc.date.issued2017
dc.description.abstractWe develop a model to investigate the manner in which the pricing, profitability, and protection strategies of a seller of a proprietary digital good respond to changing market conditions. Specifically, we investigate how product piracy and the presence of open source software alternatives (such as Open Office) impact the optimal strategy of a seller of proprietary software (such as Microsoft Office). In contrast to previous literature, we show that firms may make more (rather than less) effort to control piracy when network externalities are strong. In addition, we show that the level of network externalities amplifies losses incurred by an incumbent due to high-quality pirated goods. Therefore, for products characterized by high network externalities (such as software), sellers need to try to maintain a large perceived quality gap between their product and illegal copies. Further, we demonstrate that the appearance of an OSS alternative leads the incumbent to reduce both price and the level of piracy control. Although high-quality pirated goods are detrimental to profits in the absence of OSS, they may actually limit the incumbent’s losses and the need to adjust price and protection strategies due to the introduction of an OSS alternative. Thus, an incumbent may find it easier to compete with OSS in the presence of product piracy. Finally, highly correlated intrinsic valuation between an incumbent and OSS products require smaller adjustments to price and piracy controls and leads to muted impact on incumbent profit.pt_PT
dc.description.versioninfo:eu-repo/semantics/publishedVersionpt_PT
dc.identifier.doi10.17705/1jais.00448pt_PT
dc.identifier.eid85011333559
dc.identifier.issn1536-9323
dc.identifier.urihttp://hdl.handle.net/10400.14/33504
dc.identifier.wos000397407500001
dc.language.isoengpt_PT
dc.peerreviewedyespt_PT
dc.subjectMicrosoftpt_PT
dc.subjectNetwork externalitiespt_PT
dc.subjectOpen sourcept_PT
dc.subjectPiracy protectionpt_PT
dc.subjectSoftware piracypt_PT
dc.titleSoftware piracy in the presence of open source alternativespt_PT
dc.typejournal article
dspace.entity.typePublication
oaire.citation.endPage21pt_PT
oaire.citation.issue1pt_PT
oaire.citation.startPage1pt_PT
oaire.citation.titleJournal of the Association for Information Systemspt_PT
oaire.citation.volume18pt_PT
person.familyNameMachado
person.familyNameSainam
person.familyNameSinha
person.givenNameFernando
person.givenNamePreethika
person.givenNameRajiv
person.identifier.ciencia-idBF1F-C4E8-76CA
person.identifier.orcid0000-0003-0760-9129
person.identifier.orcid0000-0002-3967-2846
person.identifier.orcid0000-0001-7589-7455
person.identifier.scopus-author-id7102936567
person.identifier.scopus-author-id35386907800
person.identifier.scopus-author-id55429184000
rcaap.rightsopenAccesspt_PT
rcaap.typearticlept_PT
relation.isAuthorOfPublicationdc01df95-340b-485d-a379-16ff1fea6a37
relation.isAuthorOfPublication1423ce2c-751f-4872-9b40-58591e9478db
relation.isAuthorOfPublication0033bae6-ac2c-4e1d-9837-11153e100ecb
relation.isAuthorOfPublication.latestForDiscovery1423ce2c-751f-4872-9b40-58591e9478db

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