- A-Z
- Jena Economic Resea...
- Volume 1
- Do Consumers Pay Vo...
- Autor(in)
-
Friedrich-Schiller-Universität Jena. Wirtschaftswissenschaftliche Fakultät
- Erschienen
- 1. Mai 2007
- Nummer des Discussion-Papers
-
2007-011
- Schlagwort(e)
-
emotions
experience goods
experience goods
reciprocity
reciprocity
social preferences
- Zusammenfsg.
-
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.
- article pub. typess JER
- Research article
- article languages JER
- Englisch
- article research fields JER
- economics
- JEL-Classification for JER
- C24 - Truncated and Censored Models ; C70 - General ; C93 - Field Experiments ; D82 - Asymmetric and Private Information ; L82 - Entertainment; Media