PACIS 2021 Proceedings

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The freemium pricing strategy (i.e., a combination of free and premium offerings) is an increasingly popular pricing method for the information goods market. While previous studies exclusively focus on public information goods that exhibit negligible marginal distribution costs, our study focuses on one type of private information goods—online professional services, specifically online medical consultation. Our objective is to empirically examine a multi-sided medical consultation platform under a freemium business model. Specifically, we aim to examine detailed service records (over 1.9 million) from 6,925 physicians who provide consultation services on the largest China-based online medical platform. We draw on the psychological contract perspective to explore how reciprocal interaction, especially fulfilment of mutual obligations and timeliness of information provision, during free consultation influences freemium conversion (i.e., persuading free-trial users to subscribe for premium offerings). This work-in-progress paper explains our hypotheses, proposed methodological design, and future steps for empirical examination.



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