NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Ben Shiller

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Working Papers

October 2009Music for a Song: An Empirical Look at Uniform Song Pricing and its Alternatives
with Joel Waldfogel: w15390
Economists have well-developed theories that challenge the wisdom of the common practice of uniform pricing. With digital music as its context, this paper explores the profit and welfare implications of various alternatives, including song-specific pricing, various forms of bundling, two-part tariffs, nonlinear pricing, and third-degree price discrimination. Using survey-based data on nearly 1000 students’ valuations of 100 popular songs in early 2008 and early 2009. We find that various alternatives – including simple schemes such as pure bundling and two-part tariffs – can raise both producer and consumer surplus. Revenue could be raised by between a sixth and a third relative to profit-maximizing uniform pricing. While person-specific uniform pricing can raise revenue by over 50 p...

Published: “Music for a Song: An Empirical Look at Uniform Song Prices and its Alternatives.” (with Ben Shiller), Journal of Industrial Economics, December 2011 (revised version of NBER Working Paper 15390, October 2009).

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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