Pricing and monetization · Randomized online pricing field experiment and choice model
Optimizing Price Menus for Duration Discounts: A Subscription Selectivity Field Experiment
Tian, L., & Feinberg, F. M. (2020). Marketing Science, 39(6), 1181–1198.
Plain-English take
The experiment shows that overall price increases reduce opting in and selection of higher-priced plans. For your marketing: This is a useful design for testing both conversion and plan mix when changing monthly/annual prices.
How much weight to give this
4.0/5 Useful evidence with meaningful caveats
The 1–5 evidence-check score is a practical reading aid, not a formal peer review or a probability that a conclusion is true. It combines design strength (2 points), sample reporting (1), comparison/control clarity (1), and how much of the paper could be checked (1). Access affects how confidently this directory can assess a study, not the study's underlying quality. Blinding is reported separately because it is not relevant to every design.
Random assignment provides a strong comparison for effects in the tested setting.
A usable sample size is not stated in the profile's accessible source.
Randomized comparison; confirm the control condition and analysis in the paper.
This profile could be checked against an abstract or metadata, not the full paper.
Double-blind? Blinding is not reported in the source reviewed; that does not establish whether blinding was or was not used.
Research question
What the authors investigated
How should subscription businesses set menus that combine different commitment lengths and duration discounts?
Design
Randomized online pricing experiment varying overall price level and the steepness of duration-discount menus; the authors jointly model opting in and choosing a plan.
Sample and setting
Users considering subscription plans on a major online dating service.
Reported result
What the study found
The experiment shows that overall price increases reduce opting in and selection of higher-priced plans. Their joint model estimates different substitution patterns from standard choice models and suggests the studied firm priced its menu too low, especially its longest commitment.
This is a paraphrase of the source. Check the original paper for definitions, estimates, statistical uncertainty and analysis details.
Scope and transfer
Limitations to keep in view
One consumer subscription site and a model whose conclusions depend on the tested menu and demand specification. An online dating commitment menu may not predict B2B SaaS annual-plan behavior.
Possible founder application
A useful design for testing both conversion and plan mix when changing monthly/annual prices. Measure opt-out alongside which plan is chosen; don’t optimize annual-plan share alone.
Evidence access
Publisher abstract; full text may require access
INFORMS publisher page and abstract retrieved with Firecrawl; the full experiment paper was not inspected.
If only an abstract or metadata was available, the profile is limited to claims supported there. A paper's paywall does not change its evidentiary status, but it limits what we can substantiate from accessible text.