The effect of risk aversion and financing source on a supply chain of in‐app products

Abstract

We study the decisions of a distribution platform and an app developer, both risk averse, which interact via a revenue-sharing contract under the freemium business model with optional in-app purchases. The model considers the random impact of quality on the demand potential of an in-app product, and we conduct the analysis under the mean-variance framework. We investigate two financing sources for the developer's activity: self-financing and revenue-based financing by an external investor. We reach three main findings: (i) The stochastic-dominance property exists both for the platform's and the investor's profits with regard to their revenue shares; (ii) the more risk averse the developer is, the more he tends to use revenue-based financing, but he will receive a lower financing amount; and (iii) the shift from self-financing to revenue-based financing lowers the platform's expected revenue.

Analysis of software promotion strategies in product-service integrated supply chains

“…Specifically, the service fee of Tencent refers to the average cost when the consumers playing the specific game application, such as membership fee or the costs of the players within the game interface to obtain random virtual game items or services. Similar application service fee assumption can be found at Chen et al (2019), Chernonog et al (2019) and Avinadav and Bunker (2022). Moreover, we assume the potential market demand for smart device is α in both SP and MP model and the demand function is q 5 α À β(p þ s) where β measures the influence of the product price and service fee on the demand.…”

“…(2019), Chernonog et al . (2019) and Avinadav and Bunker (2022). Moreover, we assume the potential market demand for smart device is α in both SP and MP model and the demand function is q = α − β ( p + s ) where β measures the influence of the product price and service fee on the demand.…”

Risks and Requirements in Sustainable App Development—A Review

“…From a social perspective, apps can be addictive, induce social stress, or interfere with daily life and negatively impact mental and physical health [36]. Conflicting consumer rights often occur with regard to in-app purchases [11], which are not transparent from the first usage onward, but are linked to premium features or virtual items that are needed for progress. These extras are expensive and can lead to unexpected charges.…”

“…App development and use not only represent a growth market with diverse business model options, they are equally accompanied by numerous risks in production and use, such as addiction, user rights, overconsumption, privacy, security, and other concerns [9][10][11][12]. It is important for app users to be aware of these risks and the related sustainability impact.…”

Influence of the use of mobile applications on the purchasing behavior of fast-food consumers in the province of Trujillo Perú

“…Este modelo no tiene mucho tiempo desde su desarrollo, por lo que es considerada reciente, donde su empleo exitoso reside en las capacidades y conocimientos de los individuos encargados al aplicarlo en el mercado [12]. Básicamente, las aplicaciones freemium consisten en ser descargadas de forma gratuita dando la opción de comprar otras características digitales [13], es decir, en un inicio ofrecen una app móvil con funciones limitadas posibilitando la compra de funciones más avanzadas. Este último modelo es el más recurrido en la era digital, sin embargo, dentro del contexto de la presente investigación, las aplicaciones móviles estudiadas son totalmente gratuitas, dado que su objetivo principal es generar transacciones monetarias con los usuarios.…”