This paper analyzes an optimal differentiation between two competing application software products when one of the two is produced by a monopolist of a base software. The so called ‘minimum differentiation principle’ by Hotelling (1929) is inappropriate in this market category. One can see the example of our ‘optimal differentiation principle’ in a web browser market, where Microsoft’s Internet Explorer and Netscape Navigator have a certain degree of differentiation.
Lee, Sang-Yong Tom, "How Much Should My Software Differ From Yours" (2001). ECIS 2001 Proceedings. 62.