Subscription as a price discrimination device

Jean Gabszewicz and Nathalie Sonnac

No 1997090, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We 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.

Keywords: Subscription; price discrimination; press industry (search for similar items in EconPapers)
Date: 1997-12-01
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Subscription as a price discrimination device (1999)
Working Paper: Subscription as a price descrimination device (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1997090

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