An Empirical Analysis of Virtual Goods Permission Rights and Pricing Strategies

Dan Ke, Sulin Ba, Jan Stallaert, Zhongju Zhang

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

With the rapid development of the virtual world industry in the past few years, trading of virtual goods and services has grown significantly. Virtual goods creators can set different permissions to their creations, such as the length of usage, the ability to copy or modify a virtual good, or the ability to give the good to others. The permissions of virtual goods endow their creators with additional power to control the allocation and exchange of virtual goods in a virtual world. We examine how the unique virtual goods permission settings (copy, modify, and transfer) and other factors are associated with virtual goods prices. Using data from a Second Life marketplace, we find that permissions of virtual goods are not random, as creators strategically set the permissions for their virtual creations. Our results show that the copy and transfer permissions are significant factors associated with virtual goods prices. The impact of other factors on virtual goods prices is analyzed and managerial implications are discussed.

Original languageEnglish (US)
Pages (from-to)1039-1061
Number of pages23
JournalDecision Sciences
Volume43
Issue number6
DOIs
StatePublished - Dec 2012
Externally publishedYes

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Costs
Industry
Pricing strategy
Empirical analysis
Factors
Virtual worlds

Keywords

  • And Virtual Worlds
  • Permission Rights
  • Pricing Strategies
  • Virtual Goods

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Strategy and Management
  • Business, Management and Accounting(all)
  • Information Systems and Management

Cite this

An Empirical Analysis of Virtual Goods Permission Rights and Pricing Strategies. / Ke, Dan; Ba, Sulin; Stallaert, Jan; Zhang, Zhongju.

In: Decision Sciences, Vol. 43, No. 6, 12.2012, p. 1039-1061.

Research output: Contribution to journalArticle

Ke, Dan ; Ba, Sulin ; Stallaert, Jan ; Zhang, Zhongju. / An Empirical Analysis of Virtual Goods Permission Rights and Pricing Strategies. In: Decision Sciences. 2012 ; Vol. 43, No. 6. pp. 1039-1061.
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