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Building an Online Reputation with Free Content: Evidence from the E-book Market

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  • Zegners, Dainis

Abstract

An important strategy to build a reputation is to practice introductory pricing. By selling at a lower introductory price, sellers can increase demand, induce more buyers to provide feedback, and build a reputation more quickly. I examine introductory pricing in the form of offering free content. I show that offering free content to build a reputation can be a double-edged strategy. It does not only attract buyers with a high preference, but also buyers with a low preference for the product.

Suggested Citation

  • Zegners, Dainis, 2017. "Building an Online Reputation with Free Content: Evidence from the E-book Market," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168293, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc17:168293
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    More about this item

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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