The Optimal Price of the ICT Product with Network Externality Based on the Customer Delivered Value

摘要

In regard to the ICT product with network externality, both the price and the network externality factors will affect the customer perceived value of the product and purchasing decision. This paper applies the customer delivered value model to the optimal price of the ICT product with network externality, aiming to gain maximum business profit. The paper takes the following two cases into account: the customer expectation is always equal to the optimal market size or it dynamically changes with time based on the actual product market size. The results demonstrate that there are two important factors to influence the optimal price and the optimal profit: the intensity of the network externality and the customer initial expectation of the product market size. In addition, we find that when the customer initial expectation is small, it is more profitable for enterprise to offer products for free in the first appropriate period.