When writer has a promotion of a book does he sell the books at a promotional price or gives away free books?

Answer 1

They sell the books. The author would usually give a short reading from the book, answers questions and the sign copies of the book for fans. You either buy the book (after signature) or bring your copy with you for signing.

Answer 2

Nicky's right, for traditionally published books from a regular publisher. The books sell at normal retail price, too, and come from the bookstore's own stock. The author's signing is set up well in advance, and the bookstore knows to have extra copies on hand.

It's a whole different thing if the book is self-published. The writer buys the books from the vanity press, often with a discount, and lugs them into the store, sells them without that discount, in effect taking his or her royalties directly from the buyer, since author purchases are not royalty-paying. Unsold copies are then toted back out of the store.

Answer 3

The writer does not do the selling.
The publisher pays the writer a percentage of the sales.
Promotional pricing is done by the retail book stores, themselves.

The writer has access to his books and may give some away as he/she chooses.