Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234865 
Year of Publication: 
2021
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 11-2021
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
Abstract: 
This paper empirically analyzes the effect of the widely used agency model on the retail prices of e-books in United Kingdom. Using a unique cross-sectional data set of e-book prices for a large sample of book titles across all major publishing houses, we exploit cross-genre and cross-publisher variation to identify the mean effect of the agency model on e-book prices. Since the genre information is ambiguous and even missing for some titles in our original dataset, we use a Latent Dirichlet Allocation (LDA) approach to determine detailed book genres based on the book's descriptions. We find that e-book prices for titles that are sold under the agency model are 36% cheaper than titles sold under the wholesale model on average. Our results are robust to different specifications, a Lewbel instrumental variable approach, and machine learning techniques.
Subjects: 
e-books
agency
resale price maintenance
Amazon
double machine learning
Latent Dirichlet allocation
JEL: 
D12
D22
L42
L81
L82
Z11
Document Type: 
Working Paper

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