Dynamic pricing in mobile gaming apps

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School of Business | Bachelor's thesis
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Date
2018
Major/Subject
Mcode
Degree programme
Taloustiede
Language
en
Pages
22
Series
Abstract
In this thesis, I study dynamic pricing models for experience goods and their contribution to pricing in the mobile gaming app industry. Firstly, I will describe mobile gaming apps as information experience goods. I will also discuss the role of uncertainty and imperfect information in generating dynamics in experience goods markets. Secondly, I will present and assess the contribution of several pricing models for experience goods. Finally, I evaluate their contribution to pricing of mobile games. The theoretical framework of pricing experience goods suggests that optimal pricing paths for experience goods are a dynamic price reduction strategy or introductory offers depending on consumers' initial valuations in relation to their valuations after experiencing a product. However, in the mobile gaming market, the latter strategy dominates as so-called freemium or free-to-play games are the most common in the major mobile game platforms.
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Thesis advisor
Murto, Pauli
Keywords
dynamic pricing, experience goods, mobile games, apps
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