NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Behavioral Decision-Making: An Application to the Setting of Magazine Subscription Prices

Fiona Scott Morton, Sharon Oster

NBER Working Paper No. 10120
Issued in November 2003
NBER Program(s):   IO

Using data from American magazines, we explore the relationship between subscription discounts and magazine characteristics. We focus in particular on those magazine features that might lead time-inconsistent consumers to wish to engage in commitment behavior. We find that for magazines whose payoff is in the future and/or that are meritorious for other reasons, subscription discounts are lower all else equal. This finding suggests that publishers may be able to set subscription prices in order to extract rents from consumers' willingness to tie their own hands in terms of their future reading.

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Document Object Identifier (DOI): 10.3386/w10120

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