Cultural Exception? The Impact of Price Regulation on Prices and Variety in the Market for Books

Christo Genakos, Mario Pagliero, Lorien Sabatino and Tommaso Valletti

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Fixed book price (FBP) agreements are a form of resale price maintenance applied to books in various countries. FBP restricts retail price competition with the aim of promoting book production variety. Yet, despite its popularity and adoption in many countries, there is no empirical evidence on its effects. We offer systematic evidence on the impact of FBP on book variety and prices using a detailed new dataset from Italy that includes the universe of books published and bought, before and after the introduction of FBP. Our results indicate that FBP raises prices without significantly affecting the number of new books published in the marketplace. However, it also increases considerably the variety of books actually bought, especially from independent bookstores. We estimate a structural demand model that accounts for both effects, finding that consumers overall benefit from the regulation.

Keywords: Cultural Goods; Resale Price Maintenance; Book Market; Ex-post Policy Evaluation (search for similar items in EconPapers)
JEL-codes: L10 L40 L50 Z10 (search for similar items in EconPapers)
Date: 2025-03-18
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Working Paper: Cultural exception? The impact of price regulation on prices and variety in the market for books (2025)
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