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The Welfare Effects of Spotify’s Cross-Country Price Discrimination
Ist Teil von
Review of industrial organization, 2020-06, Vol.56 (4), p.593-613
Ort / Verlag
New York: Springer Science + Business Media
Erscheinungsjahr
2020
Link zum Volltext
Quelle
PAIS Index
Beschreibungen/Notizen
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.