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Why Consumers Pay Voluntarily: Evidence from Online Music

  • Tobias Regner

    ()

    (Max Planck Institute of Economics,Jena)

Customers of the online music label/store Magnatune can pay what they want for albums as long as the payment is within a given price range ($5-$18). On average, customers pay significantly more than they have to. We ran an online survey and collected responses from 227 frequent Magnatune customers to gain insights about the underlying motivations to pay more than necessary. We control for individual response- as well as sample selection-bias and find that reciprocity appears to be the major driver for generous voluntary payments. Being inclined to conform to social norms is a positive determinant for payments around the recommended price ($8).

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File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2010_081.pdf
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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2010-081.

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Date of creation: 30 Nov 2010
Date of revision: 10 Dec 2014
Handle: RePEc:jrp:jrpwrp:2010-081
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