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Software dynamic pricing by an optimization deterministic model in a monopolistic market

This paper develops an optimization model for pricing a monopolistic application software in the presence of piracy. The purpose is raising revenue produced by product’s sale with determining prices in a price skimming strategy and minimizing amount of piracy. The model is a multifunctional price sk...

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Main Author: Mesbah, R.
Format: Article
Language:English
Published: Cogent OA 2017
Subjects:
TJ Mechanical engineering and machinery
Online Access:http://eprints.utm.my/id/eprint/75933/1/RashidMesbah_SoftwareDynamicPricingbyanOptimizationDeterministic.pdf
http://eprints.utm.my/id/eprint/75933/
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85034620078&doi=10.1080%2f23311916.2016.1243023&partnerID=40&md5=4b4446bfe4b0f074e2bc26d817e6505a
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spelling my.utm.759332018-05-30T04:11:14Z http://eprints.utm.my/id/eprint/75933/ Software dynamic pricing by an optimization deterministic model in a monopolistic market Mesbah, R. TJ Mechanical engineering and machinery This paper develops an optimization model for pricing a monopolistic application software in the presence of piracy. The purpose is raising revenue produced by product’s sale with determining prices in a price skimming strategy and minimizing amount of piracy. The model is a multifunctional price skimming optimization with simplex method which accompanied by a deterministic method for calculating time intervals of each segment. A linear function is used to describe demand of each segment. In addition, a linear piracy function is proposed to make piracy a dynamic parameter. The model has the ability to apply penetration pricing and controlling market share. Rough estimates of Windows 7 sale’s parameters are used to apply in the model. Optimizing case of Windows 7 is resulted in 7.3 percent increase in revenue while value of net market share is virtually constant. Therefore, the developed model demonstrates its competence in optimizing revenue by determining prices with presence of piracy. Results of the research show that to tackle piracy, range of price skimming must be decreased in a way that highest price need to be intensely reduced while lowest one must be slightly reduced. The benefit of using this strategy, is incurring lowest revenue loss due to piracy. The Effects of an escalation in piracy on proposed optimization model include increase in number of sale, demand, selling portion, market share, and decrease in price, price difference between segments, and revenue. Cogent OA 2017 Article PeerReviewed application/pdf en http://eprints.utm.my/id/eprint/75933/1/RashidMesbah_SoftwareDynamicPricingbyanOptimizationDeterministic.pdf Mesbah, R. (2017) Software dynamic pricing by an optimization deterministic model in a monopolistic market. Cogent Engineering, 4 (1). ISSN 2331-1916 https://www.scopus.com/inward/record.uri?eid=2-s2.0-85034620078&doi=10.1080%2f23311916.2016.1243023&partnerID=40&md5=4b4446bfe4b0f074e2bc26d817e6505a
institution Universiti Teknologi Malaysia
building UTM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Malaysia
content_source UTM Institutional Repository
url_provider http://eprints.utm.my/
language English
topic TJ Mechanical engineering and machinery
spellingShingle TJ Mechanical engineering and machinery
Mesbah, R.
Software dynamic pricing by an optimization deterministic model in a monopolistic market
description This paper develops an optimization model for pricing a monopolistic application software in the presence of piracy. The purpose is raising revenue produced by product’s sale with determining prices in a price skimming strategy and minimizing amount of piracy. The model is a multifunctional price skimming optimization with simplex method which accompanied by a deterministic method for calculating time intervals of each segment. A linear function is used to describe demand of each segment. In addition, a linear piracy function is proposed to make piracy a dynamic parameter. The model has the ability to apply penetration pricing and controlling market share. Rough estimates of Windows 7 sale’s parameters are used to apply in the model. Optimizing case of Windows 7 is resulted in 7.3 percent increase in revenue while value of net market share is virtually constant. Therefore, the developed model demonstrates its competence in optimizing revenue by determining prices with presence of piracy. Results of the research show that to tackle piracy, range of price skimming must be decreased in a way that highest price need to be intensely reduced while lowest one must be slightly reduced. The benefit of using this strategy, is incurring lowest revenue loss due to piracy. The Effects of an escalation in piracy on proposed optimization model include increase in number of sale, demand, selling portion, market share, and decrease in price, price difference between segments, and revenue.
format Article
author Mesbah, R.
author_facet Mesbah, R.
author_sort Mesbah, R.
title Software dynamic pricing by an optimization deterministic model in a monopolistic market
title_short Software dynamic pricing by an optimization deterministic model in a monopolistic market
title_full Software dynamic pricing by an optimization deterministic model in a monopolistic market
title_fullStr Software dynamic pricing by an optimization deterministic model in a monopolistic market
title_full_unstemmed Software dynamic pricing by an optimization deterministic model in a monopolistic market
title_sort software dynamic pricing by an optimization deterministic model in a monopolistic market
publisher Cogent OA
publishDate 2017
url http://eprints.utm.my/id/eprint/75933/1/RashidMesbah_SoftwareDynamicPricingbyanOptimizationDeterministic.pdf
http://eprints.utm.my/id/eprint/75933/
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85034620078&doi=10.1080%2f23311916.2016.1243023&partnerID=40&md5=4b4446bfe4b0f074e2bc26d817e6505a
_version_ 1643657200626827264
score 13.211869

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