Pricing and Bundling Electronic Information Goods: Experimental Evidence

THE INTERNET UPHEAVAL: RAISING QUESTIONS, SEEKING ANSWERS IN COMMUNICATIONS POLICY (TELECOMMUNICATIONS POLICY RESEARCH CONFERENCE), 1st edition, p. 277, Ingo Vogelsang, Benjamin M. Compaine, eds., MIT Press, 2000

Posted: 7 Apr 2007

See all articles by Jeffrey K. MacKie-Mason

Jeffrey K. MacKie-Mason

UC Berkeley; University of Michigan

Juan F. Riveros

Nathan Associates

Robert S. Gazzale

University of Toronto - Department of Economics; Williams College - Department of Economics

Abstract

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.

Suggested Citation

MacKie-Mason, Jeffrey K. and Riveros, Juan F. and Gazzale, Robert S., Pricing and Bundling Electronic Information Goods: Experimental Evidence. THE INTERNET UPHEAVAL: RAISING QUESTIONS, SEEKING ANSWERS IN COMMUNICATIONS POLICY (TELECOMMUNICATIONS POLICY RESEARCH CONFERENCE), 1st edition, p. 277, Ingo Vogelsang, Benjamin M. Compaine, eds., MIT Press, 2000, Available at SSRN: https://ssrn.com/abstract=978052

Jeffrey K. MacKie-Mason (Contact Author)

UC Berkeley ( email )

102 South Hall
Berkeley, CA 94720-4600
United States

HOME PAGE: http://jeff-mason.com

University of Michigan ( email )

Ann Arbor, MI 48109-1092
United States

HOME PAGE: http://http:/jeff-mason.com/

Juan F. Riveros

Nathan Associates ( email )

Arlington, VA 22201
United States

Robert S. Gazzale

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada
416.978.2123 (Phone)

HOME PAGE: http://www.economics.utoronto.ca/gazzale/

Williams College - Department of Economics ( email )

24 Hopkins Hall Drive
Williamstown, MA 01267
United States

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