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The existence of free technologies is prevalent in a variety of industries from software to design. This study examines the competitive interaction between free and priced technologies. I draw on the literature on economic logics to predict that, in general, technologies that are freely shared are likely to stimulate interest and provide useful market information without directly competing with priced technologies. In contrast, due to direct competition, I predict that the prevalence of priced technologies will decrease the sales of other priced technologies. I find support for these hypotheses using a sample of more than 1 million transactions in over 200 distinct markets for MobileApps for the Palm computing platform. This study highlights how free technologies can be utilized to enhance performance of commercial producers.
