Fiona M. Scott Morton
Yale School of Management; National Bureau of Economic Research (NBER)
Sharon M. Oster
Yale School of Management
NBER Working Paper No. w10120
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.