Do consumers pay voluntarily? The case of online music
The paper analyses the payment behaviour of customers of the online music label Magnatune. Customers may pay what they want for albums, as long as the payment is within a given price range ($5-$18). Magnatune's comprehensive pre-purchase access facilitates music discovery and allows an informed buying decision setting it apart from conventional online music stores. On average customers pay $8.20, far more than the minimum of $5 and even higher than the recommended price of $8. We analyse the relationship between artists/labels and customers in online music. We consider social preferences, in particular concerns for reciprocity. The resulting sequential reciprocity equilibrium corresponds to the observed pattern of behaviour. We conclude that Magnatune's open contracts design can encourage people to make voluntary payments and may be a viable business option.
Year of publication: |
2009
|
---|---|
Authors: | Regner, Tobias ; Barria, Javier A. |
Published in: |
Journal of Economic Behavior & Organization. - Elsevier, ISSN 0167-2681. - Vol. 71.2009, 2, p. 395-406
|
Publisher: |
Elsevier |
Keywords: | Social preferences Reciprocity Music industry Experience goods Psychological game theory Emotions |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Do consumers pay voluntarily?: the case of online music
Regner, Tobias, (2007)
-
Governance of digital content in the era of mass participation
Regner, Tobias, (2010)
-
An artist life cycle model for digital media content : strategies for the Light Web and the Dark Web
Regner, Tobias, (2009)
- More ...