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Essays on free trials in the presence of network externality

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TitleInfo
Title
Essays on free trials in the presence of network externality
Name (type = personal)
NamePart (type = family)
Guo
NamePart (type = given)
Shuojia
NamePart (type = date)
1982-
DisplayForm
Shuojia Guo
Role
RoleTerm (authority = RULIB)
author
Name (type = personal)
NamePart (type = family)
Choi
NamePart (type = given)
Seung Chan
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Seung Chan Choi
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Advisory Committee
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RoleTerm (authority = RULIB)
chair
Name (type = personal)
NamePart (type = family)
Wang
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Lei
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Lei Wang
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Advisory Committee
Role
RoleTerm (authority = RULIB)
internal member
Name (type = personal)
NamePart (type = family)
Kim
NamePart (type = given)
Tae-Kyun
DisplayForm
Tae-Kyun Kim
Affiliation
Advisory Committee
Role
RoleTerm (authority = RULIB)
internal member
Name (type = personal)
NamePart (type = family)
Yeniyurt
NamePart (type = given)
Sengun
DisplayForm
Sengun Yeniyurt
Affiliation
Advisory Committee
Role
RoleTerm (authority = RULIB)
internal member
Name (type = personal)
NamePart (type = family)
Ishihara
NamePart (type = given)
Masakazu
DisplayForm
Masakazu Ishihara
Affiliation
Advisory Committee
Role
RoleTerm (authority = RULIB)
outside member
Name (type = corporate)
NamePart
Rutgers University
Role
RoleTerm (authority = RULIB)
degree grantor
Name (type = corporate)
NamePart
Graduate School - Newark
Role
RoleTerm (authority = RULIB)
school
TypeOfResource
Text
Genre (authority = marcgt)
theses
OriginInfo
DateCreated (qualifier = exact)
2014
DateOther (qualifier = exact); (type = degree)
2014-10
CopyrightDate (encoding = w3cdtf)
2014
Place
PlaceTerm (type = code)
xx
Language
LanguageTerm (authority = ISO639-2b); (type = code)
eng
Abstract (type = abstract)
The distribution of free trial samples has long been used as a common and important promotional to create brand awareness, improve brand loyalty, and expand product category. Not only does it provide sampled customers with firsthand experience of the true quality of the product, it also generates consumer goodwill to help expedite the diffusion of new product. Despite those advantages, however, sampling can have negative impact on the firm sometimes. Not mention the expensive cost of distributing free samples, the firm also risks losing part of the demand for its commercial product when introducing the free sampling. This leads to a dilemma for business firms: What are the effects of free sample trials? Is it always good to distribute free samples? Under what conditions should a firm offer free trial samples to the market? What is the optimal way of offering a free trial? How firm performance is improved by the free sample trials? In this dissertation, we study the firm’s optimal strategy of free trials in the presence of network externality. In the first essay, we study a software monopolist and derive (a) the conditions under which free sample trials are profitable, and (b) the optimal duration of the free trial period. We consider two underlying factors favoring free trials: resolving uncertainty about the performance of the product and the network externality. On the other hand, however, those free versions may cannibalize the sales of the paid version.We examine how a monopolist software company can optimally determine the free trial period as well as the price of the paid version. We show that the firm is more profitable to offer free trials when the network externality is modest and consumers’ initial beliefs of the product quality are low. The implementation of optimal trial duration can increase the firm’s profit substantially compared to the typical 30-day scenario. In the second essay, we build an analytical model in a duopoly setting to examine the tradeoff between network effects and the cannibalization effect, and aims to uncover the conditions under which firms should introduce the free trial product. Our proposed analytical model suggests that when network externality is large, the firm is better off providing free demos with low quality to keep vertical differentiation between itself and its competitor. Although the distribution of free trial demos with a higher quality may drive the competitor out of market, the firm will suffer from a more severe cannibalization on its own demand. The third essay is a case study. We use a unique experimental design to empirically test how the online free samples have impact on immediate sales. Specifically, using the three month transaction data from a free sampling event in a Chinese online marketplace, we adopted a difference in difference approach to study how free sample impacts on sales differs in the pre and post promotion period, and how WOM interact with free sample effectiveness to influence sales.
Subject (authority = RUETD)
Topic
Management
Subject (authority = ETD-LCSH)
Topic
Samples (Commerce)
Subject (authority = ETD-LCSH)
Topic
Sales promotion
RelatedItem (type = host)
TitleInfo
Title
Rutgers University Electronic Theses and Dissertations
Identifier (type = RULIB)
ETD
Identifier
ETD_5752
PhysicalDescription
Form (authority = gmd)
electronic resource
InternetMediaType
application/pdf
InternetMediaType
text/xml
Extent
1 online resource (x, 110 p. : ill.)
Note (type = degree)
Ph.D.
Note (type = bibliography)
Includes bibliographical references
Note (type = vita)
Includes vita
Note (type = statement of responsibility)
by Shuojia Guo
RelatedItem (type = host)
TitleInfo
Title
Graduate School - Newark Electronic Theses and Dissertations
Identifier (type = local)
rucore10002600001
Location
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NjNbRU
Identifier (type = doi)
doi:10.7282/T3CJ8G36
Genre (authority = ExL-Esploro)
ETD doctoral
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Rights

RightsDeclaration (ID = rulibRdec0006)
The author owns the copyright to this work.
RightsHolder (type = personal)
Name
FamilyName
Guo
GivenName
Shuojia
Role
Copyright Holder
RightsEvent
Type
Permission or license
DateTime (encoding = w3cdtf); (qualifier = exact); (point = start)
2014-07-31 16:49:58
AssociatedEntity
Name
SHUOJIA GUO
Role
Copyright holder
Affiliation
Rutgers University. Graduate School - Newark
AssociatedObject
Type
License
Name
Author Agreement License
Detail
I hereby grant to the Rutgers University Libraries and to my school the non-exclusive right to archive, reproduce and distribute my thesis or dissertation, in whole or in part, and/or my abstract, in whole or in part, in and from an electronic format, subject to the release date subsequently stipulated in this submittal form and approved by my school. I represent and stipulate that the thesis or dissertation and its abstract are my original work, that they do not infringe or violate any rights of others, and that I make these grants as the sole owner of the rights to my thesis or dissertation and its abstract. I represent that I have obtained written permissions, when necessary, from the owner(s) of each third party copyrighted matter to be included in my thesis or dissertation and will supply copies of such upon request by my school. I acknowledge that RU ETD and my school will not distribute my thesis or dissertation or its abstract if, in their reasonable judgment, they believe all such rights have not been secured. I acknowledge that I retain ownership rights to the copyright of my work. I also retain the right to use all or part of this thesis or dissertation in future works, such as articles or books.
Copyright
Status
Copyright protected
Availability
Status
Open
Reason
Permission or license
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ETD
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windows xp
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