Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102719
Authors: 
Gaudin, Germain
White, Alexander
Year of Publication: 
2014
Series/Report no.: 
DICE Discussion Paper 147 [rev.]
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.
Subjects: 
Electronic Books
Antitrust in High-Tech Industries
Vertical Contracting
Wholesale vs. Agency Agreements
Media Economics
JEL: 
D21
D40
L23
L4
L42
L51
L82
L86
ISBN: 
978-3-86304-146-5
Document Type: 
Working Paper

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