Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2022 International Conference on Financial Technology and Business Analysis (ICFTBA 2022), Part 1
Series Vol. 5 , 24 April 2023
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An Analysis of Competition Strategies of Note-taking App Market based on Hotelling Model Theory
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Abstract
Responses to COVID-19 have speeded the adoption of digital technologies by several years, resulting in flourishing Note-taking software markets. This paper studies the competition between the two most popular note-taking apps with horizontal differentiations for tablet users: Notability and GoodNotes 5. A modified Hotelling model is used where firms' persuasive advertisements will affect consumers' preferences, hence implicitly changing their location and their overall travel costs. A two-stage process is considered during firm competition when building up models. In the first stage, firms decide on the levels of advertisement of their products in the first stage, then set different prices to maximize profits. By solving this modified model and analyzing the equilibrium profits, the result shows that advertising leads to the same price tactics for the two firms. However, due to the existence of advertising strategies, firms have to bear the cost of this extra advertising competition. Therefore, both firms in the end will receive lower levels of profits compared to the standard model. Indicating that persuasive advertisement has caused Pareto inefficiency, leading to deadweight loss and reduced profit gains for the two firms.
Keywords
Terms-Note-taking apps market, oligopolistic competition, Hotelling model, game theory
References
1. Stacy, Elizabeth Moore, and Jeff Cain. "Note-taking and handouts in the digital age." American journal of pharmaceutical education (2015).
2. Hsu, Yi-Hung, and Chien-Hsiung Chen. "Usability Study on the User Interface Design of Tablet Note-Taking Applications." International Conference on Human-Computer Interaction. Springer, Cham, 2021.
3. Reguera, Elsa Aniela Mendez, and Mildred Lopez. "Using a digital whiteboard for student engagement in distance education." Computers & Electrical Engineering 93 (2021): 107268.
4. Hotelling, Harold. "Stability in competition." The collected economics articles of Harold Hotelling. Springer, New York, NY, 1990. 50-63.
5. Zhang, Wei, and Shuaian Wang. "Pricing of Shared-Parking Lot: An Application of Hotelling Model." International Conference on Intelligent Interactive Multimedia Systems and Services. Springer, Cham, 2018.
6. Calem, Paul S., and John A. Rizzo. "Competition and specialization in the hospital industry: an application of Hotelling's location model." Southern Economic Journal (1995): 1182-1198.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2022 International Conference on Financial Technology and Business Analysis (ICFTBA 2022), Part 1
- ISBN (Print)
- 978-1-915371-21-8
- ISBN (Online)
- 978-1-915371-22-5
- Published Date
- 24 April 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/5/20220060
- Copyright
- 24 April 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited