Dramatic improvements in high-speed and mobile connectivity have been changing the way people enjoy games. In-game purchases, virtual currency, game feature design for heterogeneous consumers, and strong competition are key challenges for game providers. This study addresses the determination of optimal game design strategies for game providers in the presence of heterogeneous players and copycat competitors. Specifically, the study incorporates pricing of virtual goods/currency into the free-to-play (F2P) mobile game design for both monopoly and duopoly cases and characterizes the optimal strategies for game providers in terms of pricing of virtual goods/currency and the game challenge level. In both cases, we derive optimal pricing and game challenge levels for game providers. In a monopoly setting, it is always in the game provider’s best interest to make the game as challenging as possible. In a duopoly setting, a reasonable first mover advantage in the form of discounted value to copycat games is required for the original providers to create original games. Our results provide useful guidelines for mobile game developers facing a threat from copycat competitors.

The providers of cloud computing services have to ensure that the service applications, cloud software, and the physical location of the cloud are secure. Furthermore, these providers need to ensure that the service is secure on the client’s side of the system. While the prior research generally examines the internal-facing (firm-side) information technology (IT) security, this article examines the external-facing (client-side) security of a cloud computing service. To examine the client-side security level we build economic models that consider the trade-offs between system usability and client-side security restrictions. Our mixed market model is based on firms with different objectives (i.e., brand building vs. profit maximizing), while the pure market model is based on firms aiming at maximizing profits. Under the mixed market model, our results indicate that it is in the best interest of each firm to be the first mover. When the brand building firm is the first mover, the client-side security restrictions are higher for both firms. In a mixed market, managers of each firm should ensure that they differentiate their client-side security from that of their competitors. In the pure market model, the client-side security depends on the value the users place on security and usability. If users significantly value usability over security then managers should maximize the differentiation in client-side security restriction. However, as users begin to value security more, the manager of the firm with the lower security restriction level should raise client-side security restrictions until the level is the equivalent of their competitors.

We analyze trade‐offs in the organization of public safety networks when network assets are distributed across districts and a district values network assets in its own and other districts. Comparing centralized, decentralized, and mixed organization forms, we capture two critical properties: interoperability among distributed technology‐based network assets and the ability of districts to opt‐in or opt‐out of the centralized form. We model the provision of public safety networks, where network assets are chosen by each district or by a federal government, where these assets have a positive cross‐district spillover that depends on interoperability, where investments in effort can be made to improve interoperability, and where districts can opt‐in or opt‐out of centralized provision. With the adoption of centralized, decentralized, or mixed provision as a result of districts' opt‐in or opt‐out choices, we identify conditions that determine when the districts deviate from the social optimum and thus regulatory intervention is beneficial to incent the socially optimal organization form. We show how the socially optimal organization form can be achieved through policy instruments such as a sharing rule for the cost of interoperability effort and direct government grants.

In this paper, we analyze the choice of interoperability approach for the provision of disaster management systems (DMS) when resources are distributed across districts, and in times of disaster resources can be shared. The degree to which sharing (a spillover) can be coordinated efficiently depends on resource interoperability. In this public sector setting, we model the provisioning of DMS as the choice between interoperability approaches; in decreasing order of centralization they are integrated, unified, and federated. A unique feature of our setting is that the interoperability approach is a collective decision by districts. Districts choose their own DMS resources and interoperability effort, and face different interoperability efficiency and technology misfit costs depending on the interoperability approach. We find that any approach can be an equilibrium depending on interoperability efficiency, and that when the social optimum deviates from the equilibrium the socially optimal approach is more centralized. When subsidies and taxes are implemented, the socially optimal interoperability approach can be achieved with budget balance. When only subsidies can be used, the socially optimal approach can be achieved but only under certain interoperability efficiency and misfit cost conditions is there a net social gain. Having an initial level of interoperability causes the equilibrium interoperability approach to shift toward a less centralized one. Our results generalize to other settings characterized by interoperability concerns, collective decisions, and spillovers.