Journal of Student Research 2015

73

Contingency Valuation and Interviews in Open-Source Software Market:

expand revenues. Successful manufacturing companies have been affected by a relatively small number of factors. They include the following: total num ber of competing suppliers (firms producing similar product), market price, production conditions (state of technological advancement), macroeconomic policies and regulations, price of inputs, and the production firm’s break-even price of the good. These fundamental microeconomic principles are the constraints on behavior that allow economists to predict how changes in the market will determine future behavior by actors involved. Private goods func tion within behavior constraints to reach an optimal outcome. Pareto opti mality (or efficiency) is a state of resource allocation in which it is impossible to make any one person better off without making at least one person worse off. Pareto optimality is a change in the distribution of resources that makes at least one person better off without making another worse off. Economic signaling theory is one party conveying information about oneself to another party to solve a problem of information asymmetry. Information asymmetry is a problem that can occur with software if online reviews are unreliable or if purchases are final at the point of transaction. Even with capable software, it may not fit the user’s desired preferences such as intuitive user interface or specific table or graph requirements. A product with a higher sticker price might achieve a greater percep tion of quality because market players may be less willing to learn “free” soft ware compared to 0