Subscription as a price discrimination device
AbstractWe propose a model representing a newspaper producer supplying a product which can be acquired by the readers either every day per one unit at a time, or by subscription. The population of potential buyers is differentiated according to the frequency at which they want to read the newspaper. First we identify the optimal pricing policy, namely, the optimal price for issues sold per unit at the newspaper-stall, as well as the optimal subscription fee. Then we show that it is always more profitable to supply the market with both possibilities, — free sale purchase and subscription —, than to concentrate the sales on either of these alternatives.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1997090.
Date of creation: 01 Dec 1997
Date of revision:
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Subscription; price discrimination; press industry;
Other versions of this item:
- GABSZEWICZ , Jean J. & SONNAC, Nathalie, . "Subscription as a price discrimination device," CORE Discussion Papers RP -1450, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean J. GABSZEWICZ & Nathalie SONNAC, 1999. "Subscription as a price descrimination device," Discussion Papers (REL - Recherches Economiques de Louvain) 1999043, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- L - Industrial Organization
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L8 - Industrial Organization - - Industry Studies: Services
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