The free-of-charge phenomena in the network economy—a multi-party value exchange model

The long-standing economic model is one where customers receive and pay for goods and services. However, in today’s modern network economy, why are vendors willing to provide free services and goods to free-riders at an apparent loss? The objective of this study is to provide a theoretical framework explaining why free network services emerge and how they work. This study adopted the multi-case study method, summarized 28 types of revenue model patterns from 51 indicative free network services, and inferred the causes for the antecedent conditions of each revenue model with Qualitative Comparative Analysis (QCA), in order to confirm the causal relationship between the various antecedent conditions, configurations, and revenue models as conclusive evidence. In addition, this study established seven conditional propositions via their links with related theories, which were taken as the basis for providing in-depth explanations of the revenue model of the free network service, and expanded the demonstration of the original network economy.