IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/19646.html
   My bibliography  Save this paper

Software Marketing on the Internet: the Use of Samples and Repositories

Author

Listed:
  • Gaudeul, Alexia

Abstract

This paper examines one of the most important marketing strategies by software producers on the Internet. That is whether to offer free samples and if so, whether to list the samples on shareware repositories. I show that firms with higher value products have a greater incentive to offer free samples but are more reluctant to do so if they are well known, and even when they do are less likely to be listed on shareware repositories. I then proceed to use four types of Probit-based models to corroborate the findings from the theoretical model.

Suggested Citation

  • Gaudeul, Alexia, 2008. "Software Marketing on the Internet: the Use of Samples and Repositories," MPRA Paper 19646, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:19646
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/19646/1/MPRA_paper_19646.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joel Waldfogel & Lu Chen, 2006. "Does Information Undermine Brand? Information Intermediary Use And Preference For Branded Web Retailers," Journal of Industrial Economics, Wiley Blackwell, vol. 54(4), pages 425-449, December.
    2. Karen Clay & Ramayya Krishnan & Eric Wolff, 2001. "Prices and Price Dispersion on the Web: Evidence from the Online Book Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 49(4), pages 521-539, December.
    3. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    4. Dina Mayzlin & Judith A. Chevalier, 2003. "The Effect of Word of Mouth on Sales: Online Book Reviews," Yale School of Management Working Papers ysm413, Yale School of Management.
    5. Sartori, Anne E., 2003. "An Estimator for Some Binary-Outcome Selection Models Without Exclusion Restrictions," Political Analysis, Cambridge University Press, vol. 11(2), pages 111-138, April.
    6. Brian Kahin & Hal R. Varian (ed.), 2000. "Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611597, December.
    7. Haruvy, Ernan & Prasad, Ashutosh, 2005. "Freeware as a competitive deterrent," Information Economics and Policy, Elsevier, vol. 17(4), pages 513-534, October.
    8. Haruvy, Ernan & Prasad, Ashutosh, 1998. "Optimal product strategies in the presence of network externalities," Information Economics and Policy, Elsevier, vol. 10(4), pages 489-499, December.
    9. Anindya Ghose & Arun Sundararajan, 2005. "Versioning and Quality Distortion in Software? Evidence from E-Commerce Panel Data," Working Papers 05-14, NET Institute, revised Oct 2005.
    10. Virginie Lethiais & Marc Bourreau, 2005. "Pricing information goods: free vs. pay content," Post-Print halshs-00010269, HAL.
    11. M. C. Jones, 2006. "Book Review," Journal of Applied Statistics, Taylor & Francis Journals, vol. 33(10), pages 1149-1151.
    12. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    13. Jacques Cremer, 1984. "On the Economics of Repeat Buying," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 396-403, Autumn.
    14. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    15. Bruno Jullien, 2005. "Two-sided Markets and Electronic Intermediaries," CESifo Economic Studies, CESifo Group, vol. 51(2-3), pages 233-260.
    16. Dirk Bergemann & Juuso Välimäki, 2006. "Dynamic Pricing of New Experience Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 713-743, August.
    17. Boom, Anette, 2004. ""Download for Free": When do providers of digital goods offer free samples?," Discussion Papers 2004/28, Free University Berlin, School of Business & Economics.
    18. J. Miguel Villas‐Boas, 2006. "Dynamic Competition with Experience Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(1), pages 37-66, March.
    19. Karen Clay & Ramayya Krishnan & Eric Wolff, 2001. "Prices and Price Dispersion on the Web: Evidence from the Online Book Industry," NBER Chapters, in: E-commerce, pages 521-539, National Bureau of Economic Research, Inc.
    20. Brousseau,Eric & Curien,Nicolas (ed.), 2007. "Internet and Digital Economics," Cambridge Books, Cambridge University Press, number 9780521855914.
    21. Eric von Hippel & Georg von Krogh, 2003. "Open Source Software and the “Private-Collective” Innovation Model: Issues for Organization Science," Organization Science, INFORMS, vol. 14(2), pages 209-223, April.
    22. Greenaway, David & Hine, Robert C & Milner, Chris, 1995. "Vertical and Horizontal Intra-industry Trade: A Cross Industry Analysis for the United Kingdom," Economic Journal, Royal Economic Society, vol. 105(433), pages 1505-1518, November.
    23. Ernan Haruvy & Ashutosh Prasad, 2001. "Optimal freeware quality in the presence of network externalities: an evolutionary game theoretical approach," Journal of Evolutionary Economics, Springer, vol. 11(2), pages 231-248.
    24. Shurmer, Mark, 1993. "An investigation into sources of network externalities in the packaged PC software market," Information Economics and Policy, Elsevier, vol. 5(3), pages 231-251, October.
    25. Lakhani, Karim R. & von Hippel, Eric, 2003. "How open source software works: "free" user-to-user assistance," Research Policy, Elsevier, vol. 32(6), pages 923-943, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paolo Crosetto & Alexia Gaudeul, 2014. "Choosing whether to compete: Price and format competition with consumer confusion," Jena Economics Research Papers 2014-026, Friedrich-Schiller-University Jena.
    2. Reinhardt, Ronny & Gurtner, Sebastian, 2018. "The overlooked role of embeddedness in disruptive innovation theory," Technological Forecasting and Social Change, Elsevier, vol. 132(C), pages 268-283.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ya-Ling Chiu & Jiangze Du & Jying-Nan Wang, 2022. "The Effects of Price Dispersion on Sales in the Automobile Industry: A Dynamic Panel Analysis," SAGE Open, , vol. 12(3), pages 21582440221, August.
    2. Lee, Seung-Hyun & Makhija, Mona & Paik, Yongsun, 2008. "The value of real options investments under abnormal uncertainty: The case of the Korean economic crisis," Journal of World Business, Elsevier, vol. 43(1), pages 16-34, January.
    3. Neeraj Arora & Xavier Dreze & Anindya Ghose & James Hess & Raghuram Iyengar & Bing Jing & Yogesh Joshi & V. Kumar & Nicholas Lurie & Scott Neslin & S. Sajeesh & Meng Su & Niladri Syam & Jacquelyn Thom, 2008. "Putting one-to-one marketing to work: Personalization, customization, and choice," Marketing Letters, Springer, vol. 19(3), pages 305-321, December.
    4. Elina H. Hwang & Param Vir Singh & Linda Argote, 2015. "Knowledge Sharing in Online Communities: Learning to Cross Geographic and Hierarchical Boundaries," Organization Science, INFORMS, vol. 26(6), pages 1593-1611, December.
    5. Sriram Thirumalai & Kingshuk K. Sinha, 2013. "To Personalize or Not to Personalize Online Purchase Interactions: Implications of Self-Selection by Retailers," Information Systems Research, INFORMS, vol. 24(3), pages 683-708, September.
    6. Michelle Haynes & Steve Thompson, 2013. "Entry and Exit Behavior in the Absence of Sunk Costs: Evidence from a Price Comparison Site," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(1), pages 1-23, February.
    7. Haizhen Lin & Yijia Wang, 2012. "Competition and Price Discrimination in the Parking Garage Industry," Working Papers 2012-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    8. Thomas, Catherine & Chen, Zhuoqiong (Charlie) & Stanton, Christopher T., 2020. "Information Spillovers in Experience Goods Competition," CEPR Discussion Papers 15255, C.E.P.R. Discussion Papers.
    9. Xulia González & Daniel Miles-Touya, 2018. "Price dispersion, chain heterogeneity, and search in online grocery markets," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 9(1), pages 115-139, March.
    10. Persson, Petra, 2018. "Attention manipulation and information overload," Behavioural Public Policy, Cambridge University Press, vol. 2(1), pages 78-106, May.
    11. Zhu, Hongwei & Madnick, Stuart & Siegel, Michael, 2003. "Global Comparison Aggregation Services," Working papers 4410-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    12. Moraga-González, José L. & Sándor, Zsolt & Wildenbeest, Matthijs R., 2014. "Prices, Product Differentiation, And Heterogeneous Search Costs," IESE Research Papers D/1097, IESE Business School.
    13. Haisken-DeNew, John & Hasan, Syed & Jha, Nikhil & Sinning, Mathias, 2018. "Unawareness and selective disclosure: The effect of school quality information on property prices," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 449-464.
    14. Edgardo Arturo Ayala Gaytán, 2009. "Social network externalities and price dispersion in online markets," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 1-28, November.
    15. Shuo Liu & Dimitri Migrow, 2019. "Designing organizations in volatile markets," ECON - Working Papers 319, Department of Economics - University of Zurich.
    16. Ghadir Asadi & Mohammad H. Mostafavi-Dehzooei, 2022. "The Role of Learning in Adaptation to Technology: The Case of Groundwater Extraction," Sustainability, MDPI, vol. 14(12), pages 1-37, June.
    17. Michael Ziegelmeyer & Julius Nick, 2013. "Backing out of private pension provision: lessons from Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(3), pages 505-539, August.
    18. Shmuel Leshem, 2010. "The benefits of a right to silence for the innocent," RAND Journal of Economics, RAND Corporation, vol. 41(2), pages 398-416, June.
    19. Lewis, Tracy R & Poitevin, Michel, 1997. "Disclosure of Information in Regulatory Proceedings," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(1), pages 50-73, April.
    20. Gayer Gabrielle & Segev Ella, 2012. "Revealing Private Information in Bargaining," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-34, December.

    More about this item

    Keywords

    Shareware; Software; Internet; Distribution; Intermediation; Directory; Repository; Advertising; Brand; Reputation; Asymmetric Information; Search; Sample;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:19646. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.