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On the Antitrust Economics of the Electronic Books Industry (2014)
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BibTeX
@MISC{Gaudin14onthe,
author = {Germain Gaudin and Alexander White and Simon Anderson and Michal Fabinger and Joe Harrington and Sonia Jaffe and Ariel Pakes and Manuel Santos and Dick Schmalensee and Marius Schwartz and Steve Tadelis and Jean Tirole and Glen Weyl and Julian Wright and Jidong Zhou},
title = {On the Antitrust Economics of the Electronic Books Industry},
year = {2014}
}
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Abstract
Abstract When Apple entered the ebook market, prices rose. A recent court decision found Apple guilty of colluding with publishers, blaming the price hike, in part, on agency agreements and prohibiting their use. Building a model to compare these with traditional wholesale agreements, we identify a single, pivotal condition that leads prices under agency to be higher than under wholesale with two-part tariffs but lower with linear pricing. Our model shows that the increase in ebook prices can be explained, instead, by heightened competition for reading devices, and it guides our understanding of when restricting agency agreements is advisable.
