Beiträge zur Jahrestagung des Vereins für Socialpolitik 2017: Alternative Geld- und Finanzarchitekturen - Session: Empirical Industrial Organization I No. B12-V2
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.