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Pricing and Bundling Electronic Information Goods: Field Evidence

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Dramatic increases in the capabilities and decreases in the costs of computers and communication networks have fomented revolutionary thoughts in the scholarly publishing community. In one dimension, traditional pricing schemes and product packages are being modified or replaced. We designed and undertook a large-scale field experiment in pricing and bundling for electronic access to scholarly journals: PEAK. We provided Internet-based delivery of content from 1200 Elsevier Science journals to users at multiple campuses and commercial facilities. Our primary research objective was to generate rich empirical evidence on user behavior when faced with various bundling schemes and price structures. In this article we report initial results. We found that although there is a steep initial learning curve, decision-makers rapidly comprehended our innovative pricing schemes. We also found that our novel and flexible "generalized subscription" was successful at balancing paid usage with easy access to a larger body of content than was previously available to participating institutions. Finally, we found that both monetary and non-monetary user costs have a significant impact on the demand for electronic access.

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File URL: http://lanfiles.williams.edu/~rgazzale/research/tprc99.pdf
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Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2000-01.

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Length: 34 pages
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Publication status: published in The Internet upheaval: Raising questions, seeking answers in communications policy, 277-305. Cambridge and London, 2000.
Handle: RePEc:wil:wileco:2000-01

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  1. Yannis Bakos & Erik Brynjolfsson, 1997. "Bundling Information Goods: Pricing, Profits and Efficiency," Working Paper Series 199, MIT Center for Coordination Science.
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