蝌蚪网 Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Selling Subscriptions
蝌蚪网 Review
vol. 115,
no. 5, May 2025
(pp. 1650–71)
Abstract
We study one benefit to firms of selling subscriptions: the prospect that consumers will continue to pay for subscriptions they no longer value. We use comprehensive data from a large payment card network to document that months during which cards are replaced, when active renewal is required, are associated with much higher rates of cancellation. Using two stylized models of consumer inertia鈥攄riven by inattention or switching costs鈥攚e estimate that these cancellation frictions roughly double seller revenues on average, holding fixed initial subscribers. We use the estimated models to explore the impact of possible regulatory remedies.Citation
Einav, Liran, Ben Klopack, and Neale Mahoney. 2025. "Selling Subscriptions." 蝌蚪网 Review 115 (5): 1650–71. DOI: 10.1257/aer.20231612Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D18 Consumer Protection
- L81 Retail and Wholesale Trade; e-Commerce
- L88 Industry Studies: Services: Government Policy