The Welfare Effects of Spotify’s Cross-Country Price Discrimination
We calibrate a simple empirical logit model of world demand—and subscription pricing—at Spotify, with the use of available data on monthly prices and using streaming volumes by country to create measures of the numbers of users. We find that country-specific pricing increases revenue by 5.9% relativ...
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| Veröffentlicht in: | Review of industrial organization 2020-06, Vol.56 (4), p.593-613 |
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| creator | Waldfogel, Joel |
| description | We calibrate a simple empirical logit model of world demand—and subscription pricing—at Spotify, with the use of available data on monthly prices and using streaming volumes by country to create measures of the numbers of users. We find that country-specific pricing increases revenue by 5.9% relative to uniform world pricing, while country specific pricing decreases world consumer surplus by 1.0%. Country-specific pricing within Europe increases revenue in Europe by 1.1%, and EU consumer surplus increases by 0.3% with country-specific pricing. Consumers in lower-income countries gain more from price discrimination than do the consumers in higher-income countries. |
| doi_str_mv | 10.1007/s11151-020-09748-0 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0889-938X |
| ispartof | Review of industrial organization, 2020-06, Vol.56 (4), p.593-613 |
| issn | 0889-938X 1573-7160 |
| language | eng |
| recordid | cdi_proquest_journals_2405451643 |
| source | PAIS Index; EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing; SpringerLink Journals - AutoHoldings |
| subjects | Consumers Discrimination Economics Economics and Finance Industrial Organization Microeconomics Prices Revenue |
| title | The Welfare Effects of Spotify’s Cross-Country Price Discrimination |
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