Sharing the Price: Subscription Sharing and Monopoly Profits
Abstract: I study whether subscription sharing raises monopoly profits. A monopolist sells a single-price subscription to heterogeneous consumers. A fraction of consumers can share and are randomly matched into pairs; after observing the price, pairs may share, buy individually, or exit. Sharing expands access for some consumers but cannibalizes individual subscriptions by replacing two accounts with one. I show that profitability depends on how consumers divide the subscription price. I compare two price-sharing rules. Under equal sharing, partners split the price evenly. Sharing serves as a cost-reduction technology and is never profit-enhancing. Under proportional sharing, the pair pools valuations and subscribes whenever joint valuation exceeds the price. Sharing becomes profitable when sharing opportunities are sufficiently prevalent. Welfare effects are ambiguous because sharing expands access but raises optimal prices.

Presented at WIPE (2026), UAB MicroLab (2026), BSE Jamboree (2026), Decisions,Policies, and Contracts (2026)

Assignment game and information acquisition