Sampling of information goods

With the development of information technology and the emergence of electronic market places, great business opportunities are created with reduced spatial restraints, lowered search costs, and increased diversity. As one of the most commonly utilized marketing tools, free sampling also has its online presence, especially for information goods that can be digitized with ease. In this article, we provide an analytical model to study the economic rationale behind free online samples. We argue that with the development of computer technologies, even a less sophisticated Internet user can be an information provider. As a result, a "free sample" is less and less under control of the seller. With our analytical framework, we find that this trend does not always hurt the seller. On the contrary, under certain circumstances, the monopolistic seller can be better off with the presence of the free samples provided by third parties. We further include advertising into our model. Based ...

• Type: Conference
• Year: 2007
• Where: ACMICEC
• Authors: Chong (Alex) Wang, Xiaoquan (Michael) Zhang
• Keywords: ACMICEC 2007, Commonly Utilized Marketing, ECommerce, Free Samples, Search Costs