Pricing Strategies of Mobile Apps and Their Effects on Piracy: An Empirical Study

Although the price of a digital product was identified as one of the determinants of committing digital piracy in the previous studies, the relationship between the price and the level of piracy has not been empirically tested with real market data. This study investigates the impact of price related factors on digital piracy in the context of the mobile app market. Particularly, it seeks to study the impact of app price, in-app purchase option, and free version on the level of app piracy. The results suggest that app price has a positive impact on the number of downloads of pirated apps while offering free version has a negative impact In addition, the number of downloads is more associated with the price for utility apps than game apps. Different from expectation, however, having in-app purchase option does not have a significant impact on the number of downloads of pirated apps.