Software Product Pricing Strategies Study Based on Dynamic Stochastic Wealth Model

The authors investigate cobweb type software product price fluctuations with adaptive learning, and put forward a dynamic software product pricing method based on the dynamic stochastic wealth model (DSWM). In this model, price of software product is divided into two parts, initial purchase price and post-implementation price, and the software product market is treat as an expectation feedback system, where the current market equilibrium price of software product determined by aggregated individual software product provider´s expectations of next period´s yield. After several rounds of price adjustment, optimal pricing strategies can be conducted. In order to describe the fluctuations of price in future, authors also developed a set of market impact functions with the technique of dynamic harmonic regression modification to simulate the market impact.