Bookshop, blockbusters and readers’ tastes: a new appraisal of the fixed book price

Mathieu Perona

MPRA Paper from University Library of Munich, Germany

Abstract: This paper models the book retail market as a dual market. Consumers choose between competitively retailed, well-identified blockbusters, and going to a monopoly bookshop to find the best match for their tastes. I show that uncertainty about the status on a given title (will it be a blockbuster or not?) places publishers in front of a trade-off between low prices (valuable if they get a blockbuster) and high prices (in the other case). The main effect of this trade-off is a decrease of wholesale prices compared with the case of full information, thus enabling the bookshop to compete with lower-priced blockbusters. Uncertainty thus increases both industry profits and consumer surplus. A fixed book price further increases consumer surplus and profits of non-blockbuster publishers, at the expense of those who get a blockbuster.

Keywords: books; fixed book price; book economy; resale price maintenance (search for similar items in EconPapers)
JEL-codes: L11 L42 Z11 (search for similar items in EconPapers)
Date: 2010-09-22, Revised 2010-09-22
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/40308/2/MPRA_paper_40308.pdf original version (application/pdf)

Related works:
Working Paper: Bookshop, blockbusters and readers’ tastes: a new appraisal of the fixed book price (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40308

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().