Optimal Software Free Trial Strategy: Limited Version, Time‐locked, or Hybrid?

Limited version, time‐locked, and hybrid are three software free trial strategies employed by software firms to exploit increased installed base and/or reduction of consumers' uncertainty about software quality. We develop an analytical model to examine these three software free trial strategies. We find that the hybrid strategy weakly dominates the limited and time‐locked versions, and the intensity of the network effects is a key factor determining which strategy is optimal.