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- Title
Subscribe, cancel, or renew: the economics of reading by subscription.
- Authors
Coyte, Peter C.; Ryan, David L.
- Abstract
We investigate a consumer's decision of whether or not to join a bookclub, and once his/her contractual obligations are fulfilled, whether to remain as a member, cancel his/her membership outright, or cancel his/her membership and subsequently rejoin the bookclub. Since the consumer's subscription strategy depends on the transaction costs of purchasing books and on the marketing strategy adopted by bookclubs, we investigate why bookclubs make introductory offers and/or enforce minimum purchase requirements. Introductory offers allow bookclubs to price discriminate between consumers who self-select alternative subscription strategies Minimum purchase requirements increase the bookclub's profit by appropriating part of the consumer surplus.
- Subjects
MARKETING; ECONOMICS; PRICE discrimination; BOOK clubs (Discussion groups); CONSUMERS' surplus
- Publication
Canadian Journal of Economics, 1991, Vol 24, Issue 1, p101
- ISSN
0008-4085
- Publication type
Article
- DOI
10.2307/135481