Selling subscriptions
Einav, Klopack and Mahoney study one benefit to a retailer of selling by subscription: consumers may keep paying after the flow benefit falls below the price, through inattention or inertia. Using comprehensive data from a large payment card network, they focus on cards that get replaced, for example on expiry, which forces an active renewal decision. Months in which a card is replaced show much higher cancellation rates across the ten subscriptions studied. They then write down and estimate a stylised model of subscription renewals.
Einav, Klopack and Mahoney study one benefit to a retailer of selling by subscription: consumers may keep paying after the flow benefit falls below the price, through inattention or inertia. Using comprehensive data from a large payment card network, they focus on cards that get replaced, for example on expiry, which forces an active renewal decision. Months in which a card is replaced show much higher cancellation rates across the ten subscriptions studied. They then write down and estimate a stylised model of subscription renewals.
Written from the abstract as shown on the OpenAlex record, read 2026-11-04.
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NBER Working Paper 31547. doi:10.3386/w31547.