Earticle

초록

영어

In this study, we design the optimal contract for user-developed applications between platform provider (e.g., Apple Inc.) and application developers (e.g., third party application developers). Currently Apple uses revenue-sharing contract with the application developers (30% to Apple Inc. and 70% to developers). Our objective is to model and evaluate the mechanism design of revenue-sharing and other possible contracts in order to find an optimal contract format such as a step-wise fee. Specifically, in our model we consider a contract design problem with a platform provider, a number of application developers, and a customer market with network externalities (i.e., network effect). A single customer may purchase a platform with a few applications but his/her willingness to pay depends on not only prices of both platform and applications, but also numbers of available applications and existing platform users, which are characterized as network externalities. The platform provider faces challenges of pricing platform as well as giving contracting incentives to application developers in order to take advantage of the network effects in the customer market. All application developers have to make decisions on whether to contract with the platform provider and how to price applications for the platform based on the number of platform users. Our study provides optimal contract design between the provider and developers as well as optimal pricing of platform and applications.

목차

Abstract
 Introduction
 Literature Review
 The Model
 Concluding Remarks
 References

저자

• Daewon Sun [ Department of Management, Mendoza College of Business, University of Notre Dame, Notre Dame, IN 46556, U.S.A. ]
• Hong Yan [ Department of Logistics and Maritime Studies, Faculty of Business, Hong Kong Polytechnic University, Hong Kong ]
• Dennis Z. Yu [ School of Business, Clarkson University, Potsdam, New York, U.S.A. ]

참고문헌