IDEAS home Printed from https://ideas.repec.org/a/kap/jculte/v28y2004i1p1-20.html
   My bibliography  Save this article

Beyond the Dogma of the Fixed Book Price Agreement

Author

Listed:
  • Frederick van der Ploeg

Abstract

After describing the essential features of the book market, a welfare analysisof the fixed book price agreement is given. Allowance is made for theopportunity cost of reading. Theoretically such an agreement pushes up bookprices and depresses book sales. However, more titles will be published,particularly books with low price elasticity and those that take a long timeto read. Potential advantages of better service, distribution and retailnetworks seem less relevant. The book market is one of imperfect competition,but even so the cross-subsidy argument is unlikely to be valid. A qualitativeanalysis of the Dutch situation is given. Tentative conclusions are that oneshould be more concerned about the number of well-stocked bookshops than thediversity of published titles and that debutantes do not face big barriers toentry. One should be even more concerned about the falling proportion ofpeople reading books. Governments fail to set (quantitative) objectives forthe fixed book price agreement, which makes it difficult to evaluate itssuccess and contributes to it being treated as dogma in the book world and thepolitical arena. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Frederick van der Ploeg, 2004. "Beyond the Dogma of the Fixed Book Price Agreement," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 28(1), pages 1-20, February.
    • Handle: RePEc:kap:jculte:v:28:y:2004:i:1:p:1-20
    DOI: 10.1023/B:JCEC.0000009817.61107.f3
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1023/B:JCEC.0000009817.61107.f3
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1023/B:JCEC.0000009817.61107.f3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Deneckere, Raymond & Marvel, Howard P & Peck, James, 1997. "Demand Uncertainty and Price Maintenance: Markdowns as Destructive Competition," American Economic Review, American Economic Association, vol. 87(4), pages 619-641, September.
    2. N. Gregory Mankiw, 1985. "Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(2), pages 529-538.
    3. Steven Salop & Joseph Stiglitz, 1977. "Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 493-510.
    4. Howard P. Marvel & Stephen McCafferty, 1984. "Resale Price Maintenance and Quality Certification," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 346-359, Autumn.
    5. Frank Mathewson & Ralph Winter, 1998. "The Law and Economics of Resale Price Maintenance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(1), pages 57-84, April.
    6. John Sutton, 2002. "Marshall's Tendencies: What Can Economists Know?," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262692791, December.
    7. Holahan, William L., 1979. "A theoretical analysis of resale price maintenance," Journal of Economic Theory, Elsevier, vol. 21(3), pages 411-420, December.
    8. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Canoy, Marcel & van Ours, Jan C. & van der Ploeg, Frederick, 2006. "The Economics of Books," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 21, pages 721-761, Elsevier.
    2. Juan José Price Elton, 2016. "Racionalidad económica de la política cultural," Estudios Públicos, Centro de Estudios Públicos, vol. 0(144), pages 165-197.
    3. van der Ploeg, Frederick, 2006. "The Making of Cultural Policy: A European Perspective," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 34, pages 1183-1221, Elsevier.
    4. Alexandra Kontolaimou & Pródromos-Ioánnis Prodromídis & Ioanna Konstantakopoulou, 2019. "The issue of fixed book pricing: Evidence based on the Greek experience," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 13(2), pages 102-120, December.
    5. Michel Clement & Anke Hille & Bernd Lucke & Christina Schmidt-Stölting & Frank Sambeth, 2008. "Der Einfluss von Rankings auf den Absatz — Eine empirische Analyse der Wirkung von Bestsellerlisten und Rangpositionen auf den Erfolg von Büchern," Schmalenbach Journal of Business Research, Springer, vol. 60(8), pages 746-777, December.
    6. Perona, Mathieu, 2009. "Bookshop, blockbusters and readers’ tastes: a new appraisal of the fixed book price," MPRA Paper 17857, University Library of Munich, Germany.
    7. Gaffeo, Edoardo & Scorcu, Antonello E. & Vici, Laura, 2008. "Demand distribution dynamics in creative industries: The market for books in Italy," Information Economics and Policy, Elsevier, vol. 20(3), pages 257-268, September.
    8. Silvi Berger & Morten Hviid, 2019. "Who Should Set Book Prices?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2019-07, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    9. Takahiro Endo, 2015. "Legal Structure, Business Organisations and Lobbying: The JapanesePublishing Sector, 1990-2001," Discussion Paper Series DP2015-19, Research Institute for Economics & Business Administration, Kobe University, revised Mar 2017.
    10. Nataliya Kochkina & Evgeniya Popova, 2017. "Are Books Luxury Goods in Russia or not?," ACEI Working Paper Series AWP-06-2017, Association for Cultural Economics International, revised Jul 2017.
    11. Productivity Commission, 2009. "Restrictions on the Parallel Importation of Books," Research Reports, Productivity Commission, Government of Australia, number 34, July.
    12. repec:pra:mprapa:40306 is not listed on IDEAS
    13. Juan Jiménez & Javier Campos, 2010. "Modelling Competition in the Textbook Market: Some Lessons still to Learn," Journal of Industry, Competition and Trade, Springer, vol. 10(1), pages 71-85, March.
    14. Fernández Blanco, Víctor & Prieto Rodríguez,Juan, 2009. "Análisis de los hábitos de lectura como una decisión económica/," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 27, pages 113-138, Abril.
    15. Françoise Benhamou & Stéphanie Peltier, 2007. "How should cultural diversity be measured? An application using the French publishing industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(2), pages 85-107, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Canoy, Marcel & van Ours, Jan C. & van der Ploeg, Frederick, 2006. "The Economics of Books," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 21, pages 721-761, Elsevier.
    2. Inderst, Roman & Pfeil, Sebastian, 2014. "An "Image Theory" of RPM," MPRA Paper 54139, University Library of Munich, Germany.
    3. John Asker & Heski Bar-Isaac, 2010. "Exclusionary Minimum Resale Price Maintenance," NBER Working Papers 16564, National Bureau of Economic Research, Inc.
    4. Tikoo, Surinder & Mather, Bruce, 2011. "The changed legality of resale price maintenance and pricing implications," Business Horizons, Elsevier, vol. 54(5), pages 415-423, September.
    5. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, January.
    6. David E. Mills, 2017. "Inducing Cooperation with a Carrot Instead of a Stick," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(2), pages 245-261, March.
    7. Matthias Hunold & Johannes Muthers, 2011. "Resale Price Maintenance: Hurting Competitors, Consumers and Yourself," Working Papers 100, Bavarian Graduate Program in Economics (BGPE).
    8. Alexandra Kontolaimou & Pródromos-Ioánnis Prodromídis & Ioanna Konstantakopoulou, 2019. "The issue of fixed book pricing: Evidence based on the Greek experience," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 13(2), pages 102-120, December.
    9. Andreas Leibbrandt, 2016. "Behavioral Constraints on Pricing: Experimental Evidence on Price Discrimination and Customer Antagonism," CESifo Working Paper Series 6214, CESifo.
    10. Fredriksen, Kaja & Runst, Petrik & Bizer, Kilian, 2017. "Masterful Meisters? Voluntary Certification and Quality in the German Crafts Sector," ifh Working Papers 3 (2017), Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh), revised 2017.
    11. Agamirova, Maria (Агамирова, Мария) & Dzagurova, Natalia (Дзагурова, Наталия), 2014. "Incentives for cooperative-specific investments from court decisions to the theoretical analysis [Стимулы Для Осуществления Кооперативных Специфических Инвестиций: От Судебных Решений К Теоретическ," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 79-97.
    12. Hoffmann, A. & Loy, J.-P., 2010. "Sonderangebote und Preissynchronisation im deutschen Lebensmitteleinzelhandel," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 45, March.
    13. Joseph E. Stiglitz, 2017. "The Revolution of Information Economics: The Past and the Future," NBER Working Papers 23780, National Bureau of Economic Research, Inc.
    14. Kwon, Illoong & Jun, Daesung, 2015. "Information disclosure and peer effects in the use of antibiotics," Journal of Health Economics, Elsevier, vol. 42(C), pages 1-16.
    15. Robert Innes & Stephen F. Hamilton, 2009. "Vertical restraints and horizontal control," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 120-143, March.
    16. Kenji, Matsui, 2011. "Resale price maintenance for supply chains distributing products with demand uncertainty," International Journal of Production Economics, Elsevier, vol. 134(2), pages 375-387, December.
    17. Tarcisio da Graça & Robert Masson, 2017. "Flawed Economic Models Have Misled RPM Policy: Changes in Canada, Europe and the United States," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(2), pages 181-207, March.
    18. Wioletta Dziuda & Giovanni Mastrobuoni, 2009. "The Euro Changeover and Its Effects on Price Transparency and Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(1), pages 101-129, February.
    19. Kaja Fredriksen & Petrik Runst & Kilian Bizer, 2019. "Masterful Meisters? Voluntary Certification and Quality in the German Crafts Sector," German Economic Review, Verein für Socialpolitik, vol. 20(1), pages 83-104, February.
    20. Fishman, Arthur, 1992. "Search Technology, Staggered Price-Setting, and Price Dispersion," American Economic Review, American Economic Association, vol. 82(1), pages 287-298, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jculte:v:28:y:2004:i:1:p:1-20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.