The economics of all-you-can-read pricing: Tariff choice, contract renewal, and switching for e-book purchases

Sang Han, Jinpyo Hong, Jae Yun Moon, Wonseok Oh

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Scopus citations

Abstract

E-book markets are currently moving through a period of disequilibrium as new pricing structures (i.e., flat-fee subscriptions) are rapidly embraced by major vendors. On the basis of a novel dataset, we investigate how the availability of "all-you-can-read" pricing programs influences consumers' tariff choice, contract renewal, and switching behaviors. Consistent with the rational choice framework, the findings suggest that most e-book consumers significantly gain from subscription-based tariffs. However, we also find some other intriguing results. Among the three subscription designs examined, the 1-week plan affords consumers more economic benefits than do 1-day or 1-month programs. The economic gains derived from subscription-based tariffs diminish as consumers renew their subscriptions under the same contract duration. Consumers who switch to other plans also suffer from reduced savings. Finally, iOS users are more inclined to select subscription models than are Android users because of the absence of in-App purchase functionalities for the former.

Original languageEnglish (US)
Title of host publication2015 International Conference on Information Systems: Exploring the Information Frontier, ICIS 2015
PublisherAssociation for Information Systems
StatePublished - 2015
Event2015 International Conference on Information Systems: Exploring the Information Frontier, ICIS 2015 - Fort Worth, United States
Duration: Dec 13 2015Dec 16 2015

Other

Other2015 International Conference on Information Systems: Exploring the Information Frontier, ICIS 2015
CountryUnited States
CityFort Worth
Period12/13/1512/16/15

Keywords

  • Digital good
  • E-book
  • Flat-fee
  • Pricing
  • Subscription duration

ASJC Scopus subject areas

  • Computer Science Applications
  • Statistics, Probability and Uncertainty
  • Library and Information Sciences
  • Applied Mathematics

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